Council leaders are warning council tax must rise by 20% over the next two years in order to meet ‘spiralling’ financial costs.
A survey by the Local Government Association (LGA) found all councils are facing additional cost pressures which were not included in their budgets for this year.
Nearly all councils (96%) said they are facing additional financial pressure or risk from energy prices rises, with 94% experiencing pay pressures.
However, it warned the scale of funding gaps faced by councils is ‘too big’ to be plugged by council tax increases alone.
Most councils are planning on using reserves or making cutbacks to services to balance their books. However, even if councils cut all spending on cultural and leisure services such as libraries, swimming pools, and waste collection they would still not have saved enough money to plug this gap.
Cllr James Jamieson, LGA chairman, said: ‘While council tax is an important funding stream, it has never been the solution to the long-term pressures facing councils, raising different amounts in different parts of the country – unrelated to need - and adding to the financial pressures facing households.
’Only with long term funding certainty to cover increased cost pressures and invest in local services, can councils make innovative and meaningful decisions over their finances, change lives and communities for the better, alleviate pressures on other parts of the public sector, support growth and save local services.’
Chancellor Jeremy Hunt has been considering raising the referendum threshold for tax increases from 3% to 5%,
