London Councils has called on the government to allow London boroughs to retain at least 50% of revenue raised through a future overnight visitor levy, arguing
that the funds should directly support local services and drive tourism growth across the capital.
The government is currently consulting on proposals that would give Mayoral Strategic Authorities in England the power to introduce local overnight visitor levies. This move would devolve new fiscal powers to London and other regions, a priority long championed by London Councils.
Under the proposed framework, London Councils recommends that local authorities automatically keep at least half of any levy collected in their area. This approach would ensure boroughs have resources to manage the impact of tourism while enhancing services such as street cleaning, licensing, business support, and community safety.
By reinvesting a portion of the levy locally, councils say the system would offer certainty to hotels and the wider hospitality sector that the revenue would benefit the areas in which they operate, supporting both businesses and the local economy.
A guaranteed local share would also act as a pro-growth incentive, encouraging boroughs to develop and sustain their tourism economies. The remaining funds could be managed jointly with the Mayor of London to support pan-London services and projects aligned with the London Growth Plan, launched last year by the Greater London Authority (GLA) and London Councils.
This pooled funding approach would aim to benefit all parts of the capital, including areas with fewer overnight accommodations but high levels of day-time visitors to major attractions.
Cllr Claire Holland OBE, Chair of London Councils, said: “It is vital that London boroughs retain a fair portion of funds raised by an overnight visitor levy to ensure we are adequately equipped to invest in local services which both support the tourist economy and mitigate the impact of tourism in our local areas.
“Boroughs shoulder many of the day-to-day costs associated with tourism – from maintaining streets and transports hubs, to supporting cultural venues and managing community safety pressures – helping to keep London attractive, clean, and safe.
“By allowing boroughs to retain 50% of the revenues raised in their area to reinvest directly in the local services and public spaces that visitors depend on, we will be able to support the growth of tourism in our city and provide confidence to businesses that this will benefit them.
“We look forward to working with the government and the Mayor on the design and implementation of the levy to ensure this is a success for Londoners and our tourist industry.”
London Councils also welcomes the government’s proposal to include all forms of short-term accommodation in the levy, including short-term rentals. The organisation emphasizes that boroughs should have a formal role in designing, implementing, and operating the levy in partnership with the Mayor. It also calls for revenue retained by boroughs to be excluded from any government resource equalisation or funding offset. Photo by Garry Knight, Wikimedia commons.