Millions of households are set to face average council tax increase of 5%

By Staff

The average annual council tax bill will rise by £106 this year as local authorities seek to maximise revenue to pay for struggling frontline services, new figures show

This year, the average annual council tax bill will go up by £106 as local councils try to get more money to support their struggling services, new data reveals.

The cost for an average Band D property will rise by 5% to £2,171. All of the 153 top-tier councils are using some or all of the social care precept of 2%, says data from the Department for Levelling Up, Housing and Communities.

This means that the total amount of council tax needed in England is £41.2 billion. That’s £2.5 billion more than in 2023/24. Also, average yearly bills have gone up by 20% since 2020/21. There are different average council tax bills in different regions. These include social care and parish precepts. In London, the average yearly bill for a Band D property will be £1,422. That’s a 5% increase on 2023/24.

Metropolitan districts outside London will see an average yearly increase of 5.4% to £1,837. Meanwhile, bills in unitary counties with no districts will go up 5% to £1,886. Also, the average bill in other county areas will go up by 5% to £1,643. Districts in these areas will add an extra £266.

Councils have warned they face tough choices because of long-term funding cuts across local government. This is despite the Government recently increasing available funding by £600 million. Annual council tax increases stayed below 1% between 2010 and 2015. But they rose to 5% for the first time in 2018/19.

At the moment, top-tier councils can’t increase council tax above 4.99%, including the social care precept, without getting approval from a local vote. In 2024-25, parish precepts will total £783 million, which is £75 million more than in 2023-24.

Some councils in severe financial difficulties have been granted permission by the Government to increase council tax beyond the 4.99% threshold. Birmingham City Council has agreed to a 9.99% rise this means yearly bills for a Band D property will be £1,793.

Earlier this month, the County Councils Network (CCN) said we need an “honest discussion” about what services local councils should have to provide after it was found that councils spend two-thirds of their budgets on care services on average.

Roger Gough, who is the Conservative leader of Kent County Council and speaks for the CCN on children’s services, said: “This month’s Budget confirmed that the public finances remain extremely tight. Therefore we need to have an honest discussion with all main political parties as we head into the general election on what councils can reasonably be expected to deliver, in a climate where substantive extra funds are unlikely and both demand and costs are set to rise.”

Shaun Davies, who is the Labour chairman of the Local Government Association, said councils are starting the financial year in a difficult position and are having to cut back or close lots of services.

“This means many are again left facing the difficult choice about raising bills to bring in desperately needed funding,” he said. “It is unsustainable to expect them to keep doing more for less in the face of unprecedented cost and demand pressures. Keeping councils on a financial drip feed has led to the steady weakening of local services. Local government needs greater funding certainty through multi-year settlements to prevent this ongoing decline.”.

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