English councils can raise council tax by inflation-busting 5.99%
County and district/borough councils are allowed to increase council tax by up to 2%.
The Secretary of State for Communities and Local Government, Sajid Javid has now announced that local authorities will be able to increase their core council tax by 1% without a local referendum, taking the possible rises “in line with inflation” to 3%.
However, once all the other precepts are included, such as funding for police, fire services and the provision for adult social care, this means councils can raise bills by up to 5.99%.
A new council tax cap to trigger a local referendum has been set at 6%. It is expected that local councils will determine their budgets by mid-March with any council tax rises coming into effect in April.
Javid said: “I am conscious of calls for further flexibility in the setting of council tax.
“While we all want to ease growing pressure on local government services, I’m sure none of us want to see hardworking taxpayers saddled with ever-higher bills.
“This settlement strikes a balance between those two aims…giving councils the ability to increase their core council tax requirement by an additional 1% without a local referendum – bringing the core principle in line with inflation.
“Under the Localism Act, local government can increase council tax as they wish – but excessive rises need to be approved by local residents in a referendum. This provides an important check and balance against the excessive increases.”
According to the TaxPayers’ Alliance, the move could add around £115 to the average Band D property.
John O’Connell, chief executive of the TaxPayers’ Alliance, said: “With wage growth stagnating and the cost of living on the rise, it beggars belief that politicians are asking for powers to take even more of people’s hard-earned money.
“Council tax has already nearly doubled in the last decade so it isn’t fair to ask residents to plug the gaps in their finances, especially when we know that council tax already hits the poorest hardest.
“Councils should instead continue to root out waste and scrap any item of spending that does not help provide an essential service.”