The east London borough that could increase council tax by 9 percent in 2026

Public spending cuts and huge surges in inflation over the past few years have hit London boroughs hard. Earlier this year, councils in desperate need of cash started taking council tax from their poorest residents for the very first time, and one east London borough had to hike its tax up more than anywhere else to avoid going bust. Now, it could be forced to do so again. 

Back in April, Newham Council got special permission to raise its council tax by 8.99 percent – nearly double the normal increase cap of 4.99 percent – in order to help it swerve bankruptcy. As Newham faces more ‘difficult decisions’ and a £53 million funding gap next year, a new report suggests that it could ask for permission to increase its council tax by the same amount again.

If that happens, a Band D property’s annual bill would go up by £122.77 to £1,488.35 (which, if council tax increases by 4.99 percent everywhere else, would still be below the London average of £1,592.63). The tax increase isn’t confirmed at this point – it’s just one of several money-raising options put forward in the council’s early budget proposals. 

Zulfiqar Ali, the council’s cabinet minister for finance said: ‘We are doing what good councils do in difficult times: planning ahead, protecting what matters most, and ensuring that every pound we spend delivers maximum value for the people of Newham.’

The council’s other proposed options include increasing fees and charges, closing children’s centres, making bin collections fortnightly instead of weekly, reducing street cleaning and cutting staff. If it goes for all of the above, the report says that the authority would save £10m. 

But that £10m may still not be enough to cover costs, and the council says that it may still need to ask the government for a package of exceptional financial support, which includes the special permission to raise tax beyond the normal cap. 

The council will confirm its choices when Newham’s first draft budget for 2026/27 is published in December. 

This east London borough is getting a multi-million-pound cultural glow-up. 

And east London is getting a brand new riverside ‘town’ with 20,000 homes.