Revealed: Labour’s financial woes as party unable to balance books this year

Labour is unable to balance its books this year, and will need “at least £4 million” to fight elections in 2026, LabourList can reveal.

According to a document seen by LabourList, the party is operating under a “recovery plan” for 2025, with the aim of bringing finances to a “planned but manageable deficit”.

The document says that Labour is in a “difficult financial position” with a staff pay freeze and strict vacancy controls in place as it seeks to stabilise its finances.

It reads: “The Party is also maximising income at every opportunity and working to rebuild our finances.

“These measures are designed not only to stabilise our immediate position, but to give us the space and resilience to pursue our core mission, winning elections in Scotland, Wales and across councils in England in 2026.”

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Summing up the party’s financial woes, the document says that Labour spent £30 million on the general election, and will need “at least £4 million” to adequately finance the 2026 elections.

“In 2025 the Party is operating under a recovery plan and budget that brings finances to a planned but manageable deficit.

“In 2026, our challenge will be to maintain that operating position while absorbing increasing costs, preparing the organisation and ramping-up on personnel for a pivotal period leading up to May 2026, and resourcing a credible, competitive campaign.

“The Party spent £30 million in the general election and will need at least £4 million to adequately resource the 2026 elections.”

If Labour’s in-year income falls short of covering its expected spending, the party may have to resort to another measure to plug the gap this year, such as using reserves or borrowing, though documents do not spell this out or signal its plan.

Labour has been contacted for comment.

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