Facing a projected £139 million funding gap, Kensington and Chelsea Council is set to introduce new council tax charges for low-income residents and a premium on second homes, reflecting broader financial crises across London’s local authorities amid government funding cuts.
Kensington and Chelsea Council is facing significant financial pressures that are set to reshape council tax policies in the borough. To tackle a projected £139 million funding shortfall, the council plans to introduce council tax charges for low-income residents for the first time and double the tax bills for owners of second homes. The council attributes this financial gap largely to government funding cuts linked to the Fair Funding Review, a reform initiative which has resulted in reduced allocations for the borough.
The funding squeeze in Kensington and Chelsea is part of a broader crisis facing London's local authorities. London Councils, the cross-borough organisation representing London’s 33 local authorities, warns that the capital as a whole faces an “impossible” £4.7 billion shortfall between 2025-26 and 2028-29. The organisation’s survey indicates that half of London’s boroughs could require emergency government support to stave off bankruptcy by 2028, driven largely by the anticipated impact of the Fair Funding Review 2.0. This reform is expected to sharply cut London boroughs' collective share of government funding, exacerbating fiscal pressures.
Despite these challenges, Kensington and Chelsea Council has approved its final budget for 2025/26, which includes a relatively modest council tax increase of four per cent, one of the lowest rises planned across London boroughs. The council also plans to support around 15,000 low-income residents with a one-off £50 payment to help with ongoing cost-of-living increases. Over the next three years, the council intends to invest more than £500 million in housing, schools, highways, transport, public spaces, and parks across the borough. These budget decisions aim to balance the need for fiscal prudence with commitments to vital local services.
Yet, the council acknowledges that without further intervention, tax increases and service reductions remain inevitable. The financial strain is compounded by other London boroughs facing similar dilemmas; at least seven boroughs are forecast to require Exceptional Financial Support from the government in 2025-26 just to balance their budgets. London's worsening homelessness crisis also stands out as the most significant risk to borough finances, amplifying spending pressures at a time of constrained resources.
Kensington and Chelsea is also considering introducing a council tax premium on second homes as part of its strategy to plug funding gaps, reflecting a wider trend across London boroughs grappling with similar budgetary shortfalls. One report estimates this reform alone could reduce the borough’s funding by £82.7 million between 2026/27 and 2028/29. The combined effect of these reforms is expected to increase council tax bills significantly for some residents while forcing councils to make tough decisions on service provision.
Taken together, these developments paint a stark picture of financial stress for London’s councils, with Kensington and Chelsea providing a clear example of how local authorities are forced to navigate unprecedented funding cuts while trying to protect vulnerable residents. The coming years will likely see continued debate over the balance between tax increases, service cuts, and government support across the capital.
📌 Reference Map:
- [1] (Evening Standard) - Paragraph 1, Paragraph 3, Paragraph 6
- [2] (Evening Standard) - Paragraph 1, Paragraph 3
- [3] (London Councils) - Paragraph 2, Paragraph 4
- [4] (Kensington and Chelsea Council) - Paragraph 3
- [5] (London Councils) - Paragraph 4
- [6] (Evening Standard) - Paragraph 5
Source: Noah Wire Services
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The narrative presents recent developments regarding Kensington and Chelsea Council's financial challenges and proposed council tax changes. The earliest known publication date of substantially similar content is 22 January 2025, when Wandsworth Council announced plans to double council tax bills for second-home owners. ([standard.co.uk](https://www.standard.co.uk/news/politics/london-homeowners-double-council-tax-wandsworth-westminster-b1205924.html?utm_source=openai)) The report includes updated data on the council's £139 million funding gap and proposed measures, indicating a high freshness score. However, the narrative references earlier reports from 9 July 2025 and 21 February 2025, suggesting some recycled content. ([standard.co.uk](https://www.standard.co.uk/news/politics/council-tax-rise-london-funding-reforms-kensington-westminster-wandsworth-b1236830.html?utm_source=openai)) Additionally, the narrative cites a press release from Kensington and Chelsea Council, which typically warrants a high freshness score. ([standard.co.uk](https://www.standard.co.uk/news/politics/londoners-council-tax-bills-doubling-kensington-chelsea-b1257133.html?utm_source=openai)) Overall, the freshness score is 8 due to the inclusion of recent data and official statements.
Quotes check
Score:
9
Notes:
The narrative includes direct quotes from Elizabeth Campbell, leader of Kensington and Chelsea Council, stating:
> "We are facing cuts of £82 million because of the Government’s fair funding review. It is our biggest budget challenge yet and it means very tough decisions ahead." ([standard.co.uk](https://www.standard.co.uk/news/politics/londoners-council-tax-bills-doubling-kensington-chelsea-b1257133.html?utm_source=openai))
A search for the earliest known usage of this quote reveals no earlier matches, suggesting it is potentially original or exclusive content. The wording matches the press release from Kensington and Chelsea Council, indicating authenticity. Therefore, the quotes check score is 9.
Source reliability
Score:
8
Notes:
The narrative originates from The Standard, a reputable UK news outlet. It references official statements from Kensington and Chelsea Council, a verified public entity. However, the report also cites earlier reports from 9 July 2025 and 21 February 2025, suggesting some recycled content. ([standard.co.uk](https://www.standard.co.uk/news/politics/council-tax-rise-london-funding-reforms-kensington-westminster-wandsworth-b1236830.html?utm_source=openai)) Overall, the source reliability score is 8 due to the inclusion of reputable sources and official statements.
Plausability check
Score:
9
Notes:
The narrative presents plausible claims regarding Kensington and Chelsea Council's financial challenges and proposed council tax changes. The council's £139 million funding gap and proposed measures align with previous reports from 9 July 2025 and 21 February 2025. ([standard.co.uk](https://www.standard.co.uk/news/politics/council-tax-rise-london-funding-reforms-kensington-westminster-wandsworth-b1236830.html?utm_source=openai)) The inclusion of official statements from Kensington and Chelsea Council adds credibility. Therefore, the plausibility check score is 9.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative presents recent developments regarding Kensington and Chelsea Council's financial challenges and proposed council tax changes, supported by official statements and reputable sources. While there is some recycled content, the inclusion of updated data and official statements indicates a high level of freshness and originality. Therefore, the overall assessment is a PASS with high confidence.
