Council tax in the UK is set to increase by an average of 4.5% in April, according the Chartered Institute of Public Finance and Accountancy (Cipfa).
The latest research found that for an average Band D household, council tax will rise by an extra £75.60 a year. It will be the second largest council tax rise in the UK in the last 10 years, after a 5.1%, or £80.92, average increase last year.
The survey from Cipfa studied 312 local authorities across the country and found that around 80% of them will increase their taxes by the maximum allowed. Councils in England can increase council tax by 2.99% plus an extra 2% for providing social care. They are technically allowed to increase it by more but must hold a local referendum to do so.
The Local Government Association has claimed that due to government cuts, local authorities throughout the UK have been left with ‘little choice’ but to increase their council tax. Around a third of the price increase will go towards funding for local police authorities.
“The extent of the rises across the country are a reflection of the incredible fiscal pressure faced by local authorities and police,” said Rob Whiteman, CEO of Cipfa. “Without a bolder vision from Government, the future of these services is increasingly being put at risk. Local authorities have faced the most significant cuts to spending over the last 10 years, and despite the Government’s announcement that austerity is ending, for local authorities this is clearly not the case.
“Long term they remain in an unsustainable position. Ministers need to make radical decisions to secure the future of public services. Council tax is regressive, and increasingly divorced from the reality of property values. They will not be sufficient to meet rising demand for services such as adult, and increasingly, children’s social care.”
Despite the criticism, the government have suggested that it is up to the local councils themselves to manage their own funding.
“We are investing in Britain’s future by providing local authorities with access to £45.1 billion this year – increasing to £46.4 billion next year – to meet the needs of their residents,” said a spokesperson for the Ministry of Housing Communities and Local Government. “Councils, not central government, are responsible for managing their own resources. Taxpayers can veto excessive increases via a local referendum.”
However, the local referendum rules only apply to English councils. In Scotland and Wales, power lies with their own governments to cap council tax hikes. Residents of Pembrokeshire in Wales will see a rise of 9.92%, while those in Scotland will see their bills rise by a maximum of 4.79%.
In England, households in London will see the highest rise in terms of percentage. The average Band D property in the capital will see their bills rise by 5.1% on average, up to £1,476 a year. In the North East of England, however, Band D homes will see an average rise of £86, up to £1,884 a year.