Council tax to rise by maximum amount in almost all areas – check how much more you’ll pay | Personal Finance | Finance

Nearly all councils are planning to raise council tax by the maximum amount permitted without holding a referendum, new analysis shows, amid a crisis in local authority funding.

New figures show 129 out of 136 county and unitary local authorities in England who have made announcements are increasing levies by 4.99 percent in April.

In some areas, the jump will be even higher – by up to 10 percent.

Four councils that have previously issued section 114 notices declaring effective bankruptcy – Birmingham, Woking, Slough, and Thurrock – have been given special dispensation by the Government to raise council tax by 10 percent.

Thurrock has opted to raise its tax by 7.99 percent, while Birmingham, Woking, and Slough are among 17 councils yet to declare their tax plans for the financial year ahead.

These changes will mean that the average Band D household faces an increase of £103 over the year.

The 95 percent of councils found to be seeking to impose the maximum rise represents a significant rise from the 75 percent of councils found to be planning to do so in research carried out at the same time last year, the CCN said.

Just three in four councils intended to levy the maximum this time last year, according to the CNN data

The CCN warned councils are still facing a collective funding gap of £1.1billion over the next two years.

Council leaders warned that taxpayers will have to bear more financial pain during the cost of living crisis.

Some councils have agreed on the maximum increase but plan to introduce measures to mitigate the impact on residents, such as making support funding available to low-income households.

Councils are said to be making savings by boosting preventative measures in children’s and adult social care, but this approach will take time to have an impact on finances.

Councillor Sam Corcoran, vice-chair of the CNN, said councils were having to make “some of their toughest decisions ever”.

He said: “County authorities face a £1.1billion budget shortfall over the next two years.

“With council tax now accounting for two-thirds of the average county authority’s funding, we have little choice but to take the difficult but necessary decision to raise council tax by 4.99 percent to continue to protect services and ward off the threat of financial insolvency in the future.”

Seventeen top-tier authorities are yet to declare their council tax intentions.

Where is going up less than 4.99 percent?

Separate research by the Local Government Chronicle has identified five councils so far that have all proposed increases below the cap:

• In Labour-run Rochdale MBC, council tax will go up by 4.99 percent but all bills will receive a one-off two percent discount for this year.
• In Hartlepool BC (Con), council tax will go up by just under 2.99 percent – the full social care levy of two percent plus 0.99 percent.
• Tower Hamlets LBC (Aspire) is putting council tax up by 2.99 percent alongside the two percent social care precept but will have a relief fund available to households with an income below £49,500.
• Stockton-on-Tees (Lab) and Nottinghamshire (Con) have both proposed rises just below the referendum cap at 4.95 percent and 4.8 percent.

Where will it go up over 4.99 percent?

The government is allowing Birmingham and Woking to raise council tax by up to 10 percent – and Thurrock and Slough can put bills up eight percent. All have effectively declared themselves bankrupt.

The CCN has called on the next government to implement a ‘comprehensive’ reform programme to drive down costs, including an overhaul of the legislative framework for school transport and action to reduce fees charged by private providers in the children’s social care market.

A Department for Levelling Up, Housing and Communities spokesperson said: “We recognise councils are facing challenges and that is why we recently announced an additional £600 million support package for councils across England, increasing their overall funding for the upcoming financial year to £64.7billion – a 7.5 percent increase in cash terms.

“Councils are responsible for their own finances and set council tax levels, but we have been clear they should be mindful of cost-of-living pressures. We continue to protect taxpayers from excessive council tax increases through referendum principles.”