Laura Sharman 05 February 2020

Cuts force most councils to increase council tax and charges

Cuts force most councils to increase council tax and charges image

The majority of councils are planning on raising council tax and charging for services in 2020/21 in order to make ends meet, new research has revealed.

A new survey by the LGiU and our sister publication The MJ, shows that only 3% of councils are happy with the Government’s progress on local finances.

Three-quarters of councils lack confidence that the retention of business rates will be an effective way of funding local government, according to the 2020 State of Local Government Finance report.

It also shows 97% of councils are planning to increase council tax, with 97% planning to increase fees and charges. Nearly a quarter of councils (23%) said these financial plans will lead to cuts noticed by the public.

Three-quarters of councils also plan to increase their level of borrowing, with over half (57%) planning to use their reserves.

Heather Jameson, editor of The MJ, said: “The local government funding system is in desperate need of an overhaul. Despite a decade of austerity, local government is doing a valiant job of holding their services together, but they can’t go on forever without proper funding.

‘While the Government is reviewing the current funding system, the reforms are unlikely to go far enough to pay for the vital services that care for our elderly, protect our children, and help our communities thrive.’

Jonathan Carr-West, chief executive of LGiU, added: ‘This isn’t local government asking for more money. This is about a fundamentally flawed system that has been broken for years and the Government continually refusing to acknowledge or engage in a proper solution. Sticking plasters will not solve these critical issues.

Writing for The MJ, Heather Jameson says the finance system is increasingly unsustainable.

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Participatory budgeting

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