Leaders and senior councillors from boroughs across the capital gathered outside the UK Parliament this week to press the government to ensure that a significant share of any new overnight

visitor levy remains in local communities. The call forms part of the “Keep the Levy Local” campaign led by London Councils.

The government is currently reviewing how a potential visitor levy—often described as a “tourist tax”—could be introduced across England, including in London. In response, London borough leaders are urging ministers to guarantee that at least half of the revenue collected from such a levy stays with the local authorities where it is generated.

According to the cross-party group representing the capital’s boroughs, allowing councils to retain a minimum of 50% of the funds would provide essential resources for services that underpin London’s tourism industry while supporting local economic growth.

While tourism delivers significant economic value to the capital, borough leaders say it also creates additional pressure on local infrastructure and services. These include street cleaning, waste collection, park maintenance, licensing enforcement, community safety, and programmes that support local businesses.

London Councils argues that directing a fair share of levy revenue back to boroughs would help maintain these services and reassure local businesses that they will benefit directly from the introduction of the tax.

Under the proposal, the remaining funds could be pooled and invested in initiatives that benefit the city as a whole. Decisions on how this money is allocated would be made jointly by borough leaders and the Mayor of London, helping fund major services that support tourism across the capital.

The plan builds on collaboration between London Councils and the Greater London Authority, which jointly developed the London Growth Plan last year. The strategy outlines a long-term vision for inclusive economic development throughout the city.

Borough leaders say securing guaranteed local funding within the national framework is especially important in London. Unlike some other regions of England, there are currently no formal structures for joint decision-making between borough councils and the Greater London Authority on issues such as levy design or revenue distribution.

Cllr Claire Holland, Chair of London Councils, said: “Boroughs are determined to ensure that an overnight visitor levy is a success for Londoners, our businesses, and our tourist industry.

 “Guaranteeing a fair share of funding to local authorities is vital to achieving this. By ensuring councils retain at least 50% of revenue raised in their area, the levy would provide much-needed funding for local services that support tourism and measures that drive economic growth. There would be clear benefits to local residents, businesses, and visitors alike.

“As ministers consider their next steps, we continue to make the case for boroughs to retain a fair share of revenues, while recognising the need to invest on a pan-London basis as well. We look forward to working with the government and Mayor of London on the design and implementation of the levy so that we get the best possible result for the capital.”

Alongside the 50% retention proposal, London Councils has outlined several additional priorities:

- All revenue generated from a visitor levy in London should remain within the capital.

- The remaining funds—after borough allocations—should be jointly managed by boroughs and the Mayor to support citywide services such as transport and policing.

- Local councils should not face reductions in government grant funding because of the additional income generated by the levy.

With ministers expected to decide on the next stage of the visitor levy framework, borough leaders say the outcome will be crucial in determining whether the policy strengthens both London’s tourism sector and the services that support it. Photo by londoncouncils.gov.uk