Tammy Hymas, who represents St Anns ward in Haringey, has submitted her resignation as a councillor but has not left the Labour Party.
Elected in 2022, she also says she has faced abuse and threats for being a transgender woman in politics.
Ms Hymas says the council is facing a £51 million funding gap and although it has received £37 million in extra funding from the Government, she could not vote for the council’s next budget on March 3.
She said: “I am really concerned that national government and the Labour Party in Westminster is not providing enough enough funding to councils given the level of need that is rising and the amount of money we are spending on homelessness, social care and SEND children.
“I will find it hard to support a budget looking at further efficiency cuts.”
Ms Hymas says the authority is looking at making £18m of “cost savings”, which could include cutting library opening hours and over 60s and disabled concessions to leisure centres.
“These are things we shouldn’t be doing right now, especially with a Labour government,” she said.
“The Labour Party nationally is making our lives difficult to deliver the services we need to so it’s very hard to justify continuing to be a councillor for a party who is doing that.”
Ms Hyman said her resignation was “not about quitting the Labour Party” and she may stand again if it elects a different leader.
She accused Sir Keir Starmer of forcing councils to make cuts, making “indefensible” cuts to international aid to justify more arms funding, and the “watering down” of commitments over Heathrow’s third runway, green pledges and lack of support over “genocide and occupation” in Gaza.
She added: “I am disappointed that he is not speaking up and banning arm sales to Israel, which he should be doing.”
She added that another factor was repeated threats of violence and constant abuse because she is trans, which led to having police supervise her ward surgery.
Haringey Labour Group said it was “disappointed” by Tammy’s resignation.
A spokesperson confirmed the council would continue to look for savings efficiencies after the £37 million government bailout.
They said the council had protected the “vast majority of frontline services” including a £1.5m investment in parks, including Chestnuts Park in St Ann’s ward.
They added: “The Labour Government cannot be expected to undo 14 years of underfunding and mismanagement in seven months.
“We will continue to work with our Labour Government on a fair funding model which reflects the needs of our communities.”
A London Labour spokesperson said: “It is disappointing that Tammy Hymas has chosen to stand down – not least as the Labour government is already making significant progress on all the issues she raises.”
They said Haringey Council has also received an 11.39% uplift in central government funding for 2025/26 and £6.77m in emergency homelessness funding.
They added: “On the middle east, we are protecting aid funding for Gaza, suspended around 30 arms export licences to Israel and restored funding to UNWRA to enable them to carry out their vital work in Gaza and the West Bank.”
