Council Tax Increase to Affect Millions


February 2016

Council Tax Increase to Affect Millions

Around 90% of local authorities in England have announced that they will be raising their council tax rates for the next financial year, according to findings from The Financial Times.

The proposed increases come as a response to the government 's policy of austerity which has led to dramatic reductions in central grants offered to local authorities.

The Local Government Association said that the recent draft of cuts to funding is likely to bring many councils "closer to the financial edge".

As a conciliatory measure announced in Osborne 's latest Autumn Statement, local councils who have responsibility towards social care will, from next year, the ability to introduce a "social care precept", effectively a 2% increase to their council tax rates. Three quarters of councils eligible to levy this new precept will be doing so, according to the Local Government Chronicle.

Current regulations mean that a local authority is allowed to increase their council tax rates by 4% without the agreement from residents in the form of the referendum. According to findings from the newspaper, 50% of the councils who intend on increasing council tax will do so by this maximum of 4%.

"For homes in charging band D" the paper reported, "a 4 per cent increase will inflate council tax bills by £58 next year, to £1,542."

The political director of the TaxPayers ' Alliance, Dia Chakravarty, has taken issue with the decision councils are making to increase their rates, saying that those councils doing so because of financial deficits "seem to forget that taxpayers are facing the same financial difficulties" themselves.

She argued that before increasing the cost to the taxpayer, councils should instead consider selling off any land or assets that they have available to them, treating council tax levies as "the last resort."

Osborne has himself suggested to councils that they sell off valuable land assets in order to raise money to pay for front end services.

The problem is that for many councils, they feel that they are already at last resort territory.

Sharon Taylor at the LGA said: "After years of striving to keep council tax as low as possible, town halls find themselves in the impossible position of having no choice but to ask residents to pay more council tax over the next few years while possibly having to offer fewer services in return."

She also said, of the extra money that would be raised by other means: "while extra income will help ease some of the funding pressures it would be wrong to think this will be enough to solve the long term pressures facing local services and communities."

Hackney 's mayor, Jules Pipe, said that she would be introducing the 2% precept, but wouldn 't be increasing council tax for the time being. However, she said that her council is "on the cusp of hard decisions."

"It is mathematically impossible," she went on, "to make up the shortfall through efficiency measures."