Local authorities could have raised an extra £2.8bn a year if council tax had risen in line with inflation, according to new research.
New analysis from the Chartered Institute of Public Finance and Accountancy (CIPFA) reveals a ‘virtual freeze’ in council tax across England for 2015. The average council tax for band D properties is set to increase by 1%, less than £16 extra.
CIPFA warned that if councils had increased council tax in line with RPI inflation since 2010, council tax for a Band D property would now be £168 higher, generating £2.8bn a year to support frontline services.
Chief executive of CIPFA, Rob Whiteman, said: ‘Although it is welcome news that action by the Government has seen households saving money on council tax, it is also important to look at the cost of this.
‘This data shows that if council tax had risen in line with inflation over the past few years there would now be additional funding available for areas in which it is critically needed, such as adult social care which in turn would relieve some of the pressure on the NHS.’
The finance body is calling for a debate on the council tax system to discover if freezing rates is sustainable and how else public services can be funded.
