Local levies should fund councils according to new London Councils proposal

Fahad Redha

February 16, 2026
4 min read

Local levies should fund councils according to new London Councils proposal

London Councils is calling on the government to ensure that boroughs can retain at least half of the funds from local levies on overnight visitors. This, they say, would fund local services which support tourism and allows local authorities to “invest in measures to support growth in the capital”

The government is consulting on proposals to allow Mayoral Strategic Authorities in England to introduce local levies for overnight visitors and devolve new fiscal powers to Lonon and other local regions, a “long-standing priority” for London Councils.

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As part of a national framework for local levies, London Councils proposes that local authorities should, “by default” be able to retain at least half of the revenue collected in their areas. This, it said, would ensure that councils “receive a share of funding that reflects the additional resource required to support the tourist economy in their area and manage its impact on the local community through extra investment in services such as street cleansing, licensing, local business support and community safety.”

This, it added, would “provide assurance to hotels, businesses and the hospitality industry that the introduction of an overnight visitor levy would directly support and benefit them, knowing that a portion of the money raised would be invested back into the specific areas they operate in to fund services they rely on and support local economic growth.”

A minimum revenue share for local authorities would also act as a “pro-growth incentive” for councils to support the growth of the tourist economy in their area, it said.

The remaining funds from local levies, according to London Councils, could be used in partnership with the Mayor of Lonon and boroughs to “support pan-London services that are critical to the tourist economy and invest in measures that would support growth and boost tourism in the capital.” Boroughs, it added, would “want to work closely with the Mayor to decide how these funds were spent, in line with the jointly-developed London Growth Plan that the GLA and London Councils launched last year.”

This money would need to be spent “in a way which supports all parts of the capital to grow their tourist economy and recognises that some areas with lower levels of visitor accommodation still experience the impact of tourism in other ways,” such as through high numbers of day-time visitors to significant attractions.

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