Tuesday, 26 Nov 2024

Inflation-busting council tax rises for households in England

Council tax for households in England will rise by 4.5% on average from April according to the Chartered Institute of Public Finance and Accountancy (Cipfa).

Its survey of local authorities found that an average band D property will be charged an extra £75.60 in 2019/20.

Although the rise is less than last year it is still the second highest in a decade.

Cipfa CEO Rob Whiteman said: “The extent of the rises across the country are a reflection of the incredible fiscal pressure faced by local authorities and police.

“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.”

That disconnect between the price of property and the amount of council tax paid is clearly shown when comparing the figures for London and the North East.

Although the capital is expected to see the highest percentage increase at 5.1%, the average bill will be £1,476.39, compared to £1,883.95 in the North East.

But in January, Hometrack UK’s cities house price index put the average price of a home in London at £479,000 against £127,000 in Newcastle.

Since 2010 central government funding for local authorities has been significantly reduced.

In October last year the Local Government Association estimated that by 2020 councils will have seen their Revenue Support Grant cut by 60% on average over the last decade.

The central funding cuts means local authorities have been under pressure to increase council tax. However any increase above the government-set threshold, 3% for 2019/20, can be vetoed via a local referendum.

And the government insists it will be giving councils more cash in the future.

A Ministry of Housing Communities and Local Government spokesman said: “We are investing in Britain’s future by providing local authorities with access to £45.1bn this year – increasing to £46.4bn next year – to meet the needs of their residents.

“Councils, not central government, are responsible for managing their own resources. Taxpayers can veto excessive increases via a local referendum.”

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