Millions face council tax rise of more than 5%


In a move that could affect millions of households, the UK government has allowed several areas to increase their council tax above the normal annual limit. Local authorities with social care duties can usually raise council tax by up to 4.99% each year, while other councils are limited to 2.99%. However, following the recent changes, Bradford Council will be allowed an increase of 10%, while Newham and Windsor and Maidenhead can rise by 9%, with Birmingham, Somerset and Trafford set to increase their bills by 7.5%.

Deputy Prime Minister Angela Rayner believes these increases are necessary to avoid councils of concern falling into further financial distress, but added that measures must be balanced with the interests of taxpayers. The government has rejected several councils’ requests to raise taxes above 4.99%, with Hampshire asking for a 15% increase to no avail.

Last week, the government released a statement on local government funding, confirming that councils will have access to over £69bn this year, a 6.8% increase in cash terms compared to the previous year. This agreement means no council will witness a reduction in core spending power, and additional funding of over £2bn will come from grant funding, on top of revenue received from council tax. The statement also revealed that councils will receive extra funds to manage the cost of increased employer National Insurance contributions.

Responding to the changes, Local Government Association chair Louise Gittins said that council finances will remain “extremely challenging” and that the extra finances next year fall short of what is desperately needed. She has called for a “more sustainable future funding system” and for “significant and sustained increases in overall funding” for councils in the upcoming spending review.

Council tax rises may worry British households, which are still recovering from the pandemic’s financial fallout. Nevertheless, local councils hope that these increases will support law enforcement, social care responsibilities, waste collection, and libraries, among others

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