Labour lost 91,000 members in 2021, the party’s latest accounts show.
The accounts, published by the Electoral Commission, said the party’s membership fell from 523,332 at the end of 2020 to 432,213 in a year.
Membership peaked in recent years at 564,443 in 2017 at the height of the Jeremy Corbyn-inspired membership boom. It had fallen to 518,659 by 2018.
The party also ended the year with a financial deficit of more than £5 million.
The figures were described by Momentum as “alarming”, as the pro-Corbyn left-wing pressure group pointed the finger of blame at Keir Starmer’s leadership.
Income from membership fees dropped from £19.3 million to £16.2 million in 2021, though last year’s fees were comparable with 2017 and 2018 levels.
The party treasurer’s report described 2021 as a “difficult and demanding year”, with redundancy pay-offs to cut costs in the long term contributing to the loss.
“Party finances do remain challenging with pressure on income coinciding with increasing costs,” the report said.
The size of Labour’s deficit went up from £1 million to £5.2 million.
The report continued: “The one-off cost of the voluntary severance scheme contributed to the deficit result which required the allocation of cash reserves to fund. For the avoidance of doubt, the Party remains debt free.”
But the report also said there had been a return to more normal operations after Covid, and a Labour spokesman said the party was “on track to returning to a firm financial footing”.
In 2021, the party raised nearly £10 million in donations, including from members, supporters, major donors and unions, up from £5.7 million a year earlier.
Commercial income increased by £2.5 million in 2021.
Labour’s income was also significantly higher than the Conservative Party’s last year, raising nearly £46 million compared with the Tories’ £32 million.
A Labour spokesman said: “Thanks to Keir Starmer’s firm leadership and clear commitment to taking Labour back into power, the party is on track to returning to a firm financial footing – with commercial income and donations rising significantly.”
But Momentum blamed Starmer’s failure to stand by the 10 policy pledges made during the 2019 leadership campaign and his stance towards trade unions for the exodus of members.
The group tweeted: “These figures are alarming.
“Keir Starmer’s pledge-breaking & factional approach have prompted an exodus of members and a financial crisis for the Party.
“Yet the Leadership has welcomed these departures while alienating Labour’s affiliated trade unions.”