GLA’s Financial Strategies for 2025-26: A £5.8 Billion Revenue Forecast
The Greater London Authority (GLA) is projected to generate £5.8 billion in revenue for the 2025-26 fiscal year, derived primarily from council tax, business rates, and the Crossrail Business Rate Supplement. Of this amount, a substantial £3.9 billion is expected from the business rates retention scheme, reflecting the GLA’s share of the total tax revenues in London.
Business Rates and Council Tax Revenues
A significant portion of the GLA’s incoming funds will come from approximately 315,000 businesses in London. From the £3.9 billion anticipated under the business rates scheme, around £870 million is earmarked for the government to assist in funding services outside London. Additionally, the GLA plans to receive over £1.6 billion via the Mayor’s council tax precept, which affects around 3.8 million band D equivalent domestic properties in the capital. Another £260 million is expected from the Crossrail Business Rate Supplement, due to be collected from approximately 48,000 properties valued over £75,000.
The Importance of Accurate Collecting
The GLA relies on the 33 London boroughs for the collection of these revenues and faces challenges in ensuring accurate forecasts and collection rates. Various issues such as property omissions from local valuation lists and misclassifications can significantly impact the overall income. Inaccurate valuations or delays in addressing changes in property status can lead to substantial revenue losses.
Debt Management and Ethical Collection Practices
As of March 31, 2025, the GLA’s share of council tax and business rates arrears in London was approximately £640 million, with £330 million attributed to council tax and £310 million to business rates. The pandemic and escalating cost-of-living crisis have complicated collections, making it vital for the GLA to support the boroughs in effective debt management strategies.
Investments in Revenue Maximisation Projects
Since 2020-21, the GLA has invested in multi-year agreements to enhance revenue maximisation efforts across London’s boroughs. These include funding for initiatives aimed at minimising arrears and tackling adjustments in council tax support schemes. In the last fiscal year, £7 million from the GLA, matched by £12 million from billing authorities, led to an estimated £125 million increase in rateable value on the business rates list, showcasing a notable return on investment.
Anticipated Challenges Ahead
Looking forward, several factors pose risks to London’s financial resources, including a nationwide revaluation of non-domestic properties set for April 2026. This could result in considerable changes to local tax bases and necessitate careful implementation to maintain revenue stability. Additionally, forthcoming government funding reforms and potential adjustments in council financing could require boroughs to rethink their income collection strategies.
Background
This financial framework is critical as it outlines how the GLA plans to manage and maximise revenues in the face of economic uncertainties and evolving governmental policies. Understanding these intricacies is essential for citizens and stakeholders in London, as it directly affects public services and infrastructure funding across the capital.
Source: official statements, news agencies, and public reports.
https://www.london.gov.uk/md3458-council-tax-and-business-rates-income-maximisation-funding-and-associated-support-london
