London's wealthiest borough hits residents with shock 70% council tax hike plan

London’s most expensive borough has unveiled plans to hike council tax by up to 70%, as funding cuts and spiralling costs leave local authorities scrambling to plug multi-million-pound budget black holes.The borough is London’s most expensive to live in, with the average cost of buying a home standing at £1.37million.Council chiefs are set to consult residents on three options for tax increases: maintaining the previously assumed annual rise of 5%, or introducing a much steeper increase of either 65% or 70% in 2027/28, followed by annual increases of 5% in subsequent years.Households eligible for council tax reductions will continue to receive the same percentage discount on their bills, meaning the amount of financial support they receive will increase alongside council tax.RBKC is forecasting savings of around £65 million, but says further action is needed to address the financial challenges ahead.Councillor Emma Will, Lead Member for Finance and Deputy Leader at Kensington and Chelsea Council, acknowledged that the prospect of a 70% increase in council tax for residents will be “deeply worrying”.A row of colourful terraced houses near Portobello Road Market in Notting HillAFP/Getty“This is not a proposal I ever wanted to bring forward, but the Government’s unfair funding review has left us facing an almost impossible financial challenge,” she explained.“We have spent years keeping council tax low and managing public money carefully. Now, instead of being rewarded for that record, we are effectively being punished for it.“Even after finding more than £50 million in savings, with over £65 million more to come, we must act now or face even tougher choices in the future.Read MoreThe proposals will be discussed by council leaders on Wednesday, November 11, ahead of a public consultation due to launch the following Thursday. No final decision will be made until the budget is set at a full council meeting in March 2027.“I will not pretend these are easy decisions,” Ms Will said.“We will listen carefully to residents before deciding what happens next, and my priority remains protecting the services that matter most, making every penny count and continuing to fight for a fairer deal from Government. Our residents deserve nothing less.”RBKC claims Government funding reforms are expected to reduce its financial resources by more than £100 million – including £17.9 million in 2026 and 2027 and a further £91 million between 2027 and 2031.Residents in K&C face staggering council tax hike of up to 70%PA ArchiveThe biggest impact is expected between 2029 and 2030, when transitional funding arrangements are due to end, according to the council.In practical terms, the projected cuts mean significantly less money available to deliver local services.A fundamental review of how those services will be delivered and funded is yet to be considered.RBKC is the latest London council to consider raising council tax beyond the usual 5% threshold, as authorities across the capital warn of increasingly severe financial pressures.Hammersmith & Fulham has proposed a potential increase of up to 150% as it attempts to plug a £160 million funding shortfall over the next four years.Historically low-tax Wandsworth Council has proposed a record 94% increase, adding £958 to an average Band D bill from April 2027 and affecting thousands of residents.Westminster City Council has warned of potential increases of between 75% and 200% to balance its books under the new funding distribution.Thousands of Londoners face council tax rises in April next yearGetty ImagesThe City of London Corporation has also been granted statutory permission to exceed the cap over the next two years.Meanwhile, councils in Barnet, Bromley and Lambeth have all asked the Government for permission to increase council tax by more than the 5% national cap.All three have turned to residents to help plug funding gaps following the introduction of the Fair Funding Formula.The controversial framework was officially launched by Angela Rayner in June last year, but has faced criticism over how it reduces funding for areas deemed to have greater revenue-raising potential.The record was set by Croydon Council in 2023, when council tax was increased by 15%. Slough residents saw their payments rise by 10% in the same year.Shadow local government secretary Sir James Cleverly said Londoners are facing a “Burnham penalty on their council tax”.The Conservatives are calling on Local Government Secretary Angela Rayner to urgently review the funding changes, which they say are “set to worsen the lives of local residents across London and the South East”.However, the Government has defended the reforms.A spokesperson argued that ministers are “fixing an outdated funding system” under which some of the wealthiest parts of the country “benefitted from exceptionally high levels of government support, while communities facing greater pressures lost out”.They added that the reforms make the system “fairer for taxpayers across the country”.Alongside the proposed council tax increases, RBKC is planning significant investment following the November 2025 cyber-attack.The council is proposing £19.1 million in one-off investment from reserves up to 2028/29. It is also seeking £13.2 million from reserves to fund its K&C 2030 transformation programme.