Published: Thursday 26 February 2026
Kensington and Chelsea Council approved its budget for 2026 to 2027 with savings and council tax measures following a meeting at Full Council on Wednesday 25 February 2026.
Government’s funding cuts
Kensington and Chelsea is facing £108 million in funding cuts over four years due to the Government’s new Fair Funding Review. Six councils, including five in London, have been negatively impacted by the changes that were announced in December 2025. The tax decisions are some of the measures taken to help close the budget gap.
What's in our budget for 2026/27
- Council tax will increase by 4.99 per cent
- A 100 per cent premium on second homes
- A 10 per cent reduction in council tax support
Savings measures
The Council is already making over £21 million in savings through a staff voluntary redundancy scheme, making better use of its buildings and finding opportunities to generate income through advertising.
Cllr Elizabeth Campbell, leader of Kensington and Chelsea Council, said:
“This is one of the most challenging budgets we have ever had to set, with over £21 million in savings through careful planning and efficiency measures.
“The Government’s so-called Fair Funding Review is anything but fair and expects councils like ours to do more with less money as we face £108 million cuts in funding over four years.
“Despite funding pressures, this budget demonstrates our ambition, resilience and commitment to deliver high standards of service for our residents.”
Investing in our borough
The Council will spend on the day to day running of local services including twice weekly bin collections and enforcement. We have invested £700,000 towards cleaner streets, £4.4 million to improve Portobello Road and £8 million into parks and green spaces.
Over 400 responses in our budget consultation
- 84 per cent of respondents said they understood why the Council was having to look at reducing services, make savings and increase fees/taxes
- 48 per cent supported a 5 per cent increase in council tax
- 60 per cent supported a second homes premium.
A separate consultation on the Council tax Reduction Scheme received 546 responses and ran from 27 October 2025 to 7 December 2025. On 28 January 2026 at Full Council, Councillors agreed to reduce Council Tax support by 10 per cent. This means people currently receiving 100 per cent relief on their bill will now receive 90 per cent relief.
Full details on budget and council tax for 2026/27 will be published soon on the Council's website.
Video: Cllr Campbell's speech
- Transcript of this video
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(00:01) Thank you, Mr. Mayor, colleagues and residents here and at home. Tonight, we're meeting to set the budget for the year ahead. A budget that reflects our priorities, our values, and our determination to deliver for every part of our borough. Across local government, the financial climate remains exceptionally challenging.
(00:22) Demand for adult and children's social care continues to rise sharply. Inflationary pressures have driven up contract prices and national funding reforms, particularly the so-called fairer funding review, has disproportionately impacted inner London borrowers like ours. Let me be clear, the redistribution of funding away from London has meant that councils serving complex, densely populated, high-cost communities have seen resources squeezed year after year.
(00:53) Inner London authorities will lose hundreds of millions of pounds collectively, over a hundred million here in Kensington and Chelsea. And despite high levels of deprivation sitting alongside a affluence, despite acute housing pressures, and despite some of the highest service delivery costs in the country, we are expected to do more with less.
(01:17) And yet, despite this, Kensington and Chelsea continues to present a balanced and sustainable budget for 2627, closing a gap of more than 30 million pounds through careful planning and efficiencies, all whilst protecting frontline services. That resilience, Mr. Mayor, is not accidental. It is the result of disciplined financial management over many years.
(01:45) We maintain strong reserves. We carry low levels of debt compared with many authorities. We've made the most of private sector funding and unlock pension funding in innovative ways. And we take a long-term review through a robust medium-term financial strategy. This year's budgets include proposals for a 4.99% council tax increase,
(02:08) including the 2% adult social care precept. That is not a decision that any council takes lightly. >> But even with this increase, we remain amongst the lowest council tax rates in London whilst ensuring we can meet growing care demands. And alongside this, the introduce introduction of 100% premium on second homes is expected to raise nearly 8 million pounds annually.
(02:37) Funding that will directly support vi vital services and priorities. Importantly, we are also investing nearly1 million pounds of additional investment in street cleaning and tackling antisocial behaviour, responding directly to residents concerns about the cleanliness of our streets and the need to maintain safe, respectful neighbourhoods in this royal borough.
(03:02) Even as we navigate national funding pressures, we are continuing to invest where we can in sensible ways. We have approved a 4.4 4 million investment program for the Portobello road, enhancing safety, improving drainage and flood resilience, upgrading licencing, uh, lighting, apologies, um, widening footways in key areas, and increasing greening.
(03:26) Portobello is both a global destination and a vital local high street, and this investment ensures it will remain vibrant and fit for the future. After a sustained campaign, we've won a commitment to deliver step-free access at South Kensington station, transforming accessibility for residents, hospital patients, families, and visitors.
(03:48) This is a long fought for improvement that demonstrates what both partnership and persistence can achieve. We remain committed to finishing what we started at Lancaster West, including uh improvements to housing quality, community facilities, and the public realm. ensuring long-term stewardship and safe, high-quality homes for residents.
(04:11) We've asked government ministers if they feel the same. And we're creating something entirely new, a new Riverside public open space at Lots Road, our first new council-owned open space in decades with trees, seating, play space, and temps path access. This project enhances connectivity and creates a whole new public space.
(04:34) All of this sits within a capital program of more than 200 million pounds over the next five years, investing in housing, highways, schools, digital infrastructure, and amazing public spaces. And of course, this year also tested us with a serious cyber attack in November. The disruption to systems was significant.
(04:58) planning platforms, housing systems and payment services were effective. Recovery has required substantial technical work and will need additional investments which we are planning for. But because we plan prudently, because we maintain reserves and contingency capacity, we have been able to manage that challenge while keeping essential services running.
(05:20) Social care visits continued. Waste collection continued. Support for vulnerable residents continued. Planning and payments will be back online shortly. We are rebuilding systems stronger and more secure, investing in enhanced cyber resilience and ensuring we learn lessons that protect residents and businesses in the future.
(05:43) This budget therefore protects our adult social care spending, our children's services and everyday services residents rely on. It invests in infrastructure and public realm. And it strengthens resilience, financial, digital, organisational. Nearly 1,000 residents participated in this year's financial and budget consultations.
(06:09) They engage seriously with the difficult choices involved. But it is worth noting that while we have done the hard work of presenting a balanced deliverable budget, the opposition on this council have not even brought forward an alternative proposal. >> A quite incredible position considering their own government hadn't bothered to do the sums either.
(06:34) Mr. Mr. Mayor, setting a budget is not an abstract political exercise. It is a statutory responsibility. It requires credibility, realism, and detailed work. If you aspire to govern, you must be prepared to do that work. Today's budget demonstrates that we are. It reflects careful stewardship in the face of reduced inner London funding.
(07:01) It reflects ambition in projects like Portoella Road, South Kensington accessibility and lots road open space. It reflects resilience in the face of a cyber attack. And it reflects our unwavering commitment to delivering high standards of service for residents. Mr. Mayor, this is a responsible, forward-looking and investor to succeed budget, and I look forward to hearing from other colleagues throughout the evening. Thank you.