More than a quarter of primary school places in Westminster are empty, according to a council report.
According to the Local Democracy Reporting Service, Westminster City Council has warned of financial implications of falling pupil numbers.
Declining numbers were raised as a risk to school budgets in a report reviewing the council's financial performance in the first few months of 2024/25.
Westminster Council officers explained schools' income is linked to its pupil numbers.
According to Westminster City Council the level of surplus capacity in the borough’s primary schools is increasing.
It reached 25.9% in January, up from 24.1% in 2023 and 23.1% in 2022, the report said.
The surplus capacity would be "much higher" if action had not been taken removing spaces from primary provision, the report added.
It estimated unless more primary school places are removed, the surplus could reach 30.2% by 2027.
At a council meeting on Thursday, Sarah Newman, bi-borough executive director of children’s services at Westminster City Council, explained it is the local authority's responsibility to ensure schools can balance budgets.
“If they can’t we then work with school governors to come up with plans such as federation and amalgamation in order to bring the deficits down,” she said.
Council officers said the surplus capacity would need to be reduced "to a level that is considered reasonable for an Inner London borough with significant mobility".
They said because schools’ income is directly linked to their pupil numbers, “there is a risk of school budgets falling into deficit which could come back to the council if they cannot balance their budgets”.
According to a separate analysis from London Councils published earlier this year, the capital could see a decline in reception pupils of 4.4% by 2027/28, alongside a 4.3% drop in demand for year seven places.