Councils set to hike taxes by £1.2bn but 'still plan to cut services' – new research

Posted On: 
26th February 2018

The average council tax bill is expected to increase by £107 this year, according to new research by the Local Government Association.

Communities Secretary Sajid Javid announced last year that councils would be able to raise taxes by up to 5.99%

Across the UK it will amount to a total rise of around £1.2bn as local authorities take advantage of new freedoms to raise funds.

Last year Communities Secretary Sajid Javid announced that councils would be able to hike annual rates by 2.99%, increasing to 5.99% if the extra cash is funnelled directly into social care.

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But according to the LGA the added funds will not cover the £1.4bn in cuts from central government and the rise in the minimum wage.

LGA chairman Lord Porter said: “Since 2010, council tax bills have risen by less than inflation and other key household bills.

“But faced with severe funding pressures, many councils feel they are being left with little choice but to ask residents to pay more to help them try and protect their local services.

“The extra income this year will help offset some of the financial pressures they face, but the reality is that many councils are now beyond the point where council tax income can be expected to plug the growing funding gaps they face.’

“Extra social care funding will be wiped out by the significant cost pressures of paying for the Government’s national living wage and extra general council tax income will only replace a third of the central government funding they will lose this year.

“This means councils will have to continue to cut back services or stop some altogether to plug funding gaps.”

A spokesman for the Ministry of Housing, Communities and Local Government responded: “As part of our finance settlement we are delivering a real-terms increase in resources to councils over the next two years, more freedom and fairness, and greater certainty to plan and secure value for money.

“We want to work with local government to develop a new funding system for the future and encourage councils to submit responses to the review currently under way.”