Heather Jameson 27 March 2019

Councils defend council tax hikes

Councils have had ‘little choice’ but to raise council tax to protect local services, the Local Government Association (LGA) has said, after the latest tax rises were revealed.

Figures released by the Ministry of Housing, Communities and Local Government (MHCLG) show average Band D council tax will rise by 4.8% for 2019-20 to £1,750.

Of the 151 adult social care authorities, 85 will use some or all of their social care precept to increase council tax by up to an additional 2%.

Responding to the figures, chair of resources at the Local Government Association, Cllr Richard Watts, said councils had lost 60% of their funding between 2010 and 2020 and faced a £3bn funding gap this year.

‘Faced with a government funding settlement that assumes maximum council tax rises and such funding pressures, many councils feel they have little choice but to ask residents to pay more council tax again this year to help them try and protect their local services,’ he said.

‘If the Government fails to adequately fund local government as part of the Spending Review there is a real risk to the future financial viability of some services and councils.’

According to MHCLG figures, London will have the lowest average Band D council tax at £1,477, up by £72, while shire areas will see the highest average at £1,826, up £82 on last year.

Seven areas will see Band D council tax top £2000. They are Rutland (£2,043), Nottingham (£2,038), Dorset (£2,038), Lewes (£2,024) and Newark and Sherwood (£2,024).

The County Councils’ Network says its members have been left little choice but to raise council tax bills due to historic underfunding. Counties receive £148 per person for public services in 2019-20, compared with £437 for inner London boroughs and £319 per head in major cities.

CCN finance spokesman, Cllr Nick Rushton, said: ‘No-one wants to put up council tax, but many of us have very little option with county authorities facing the most severe financial pressures.

‘Despite welcome announcements last year, the picture remains extremely challenging; council tax rises alone will not offset the funding pressures social care authorities face.

‘This has left most of us unable to turn down desperately-needed resource, particularly when there is finite money for care services.’

Of the £31.4bn raised by council tax in 2019-20, £200m will be raised through the adult social care precept and £554m through parish precepts.

Speaking at a post Spring Statement briefing earlier this month, Institute of Fiscal Studies director Paul Johnson said there was no way for business rates and council tax to go up fast enough to pay for the rising cost of adult social care.

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