Council tax increases despite government incentives

Council tax bill The government has asked councils to freeze local taxes for the third year running

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More than 40% of councils in England are planning to increase council tax this year, according to a survey.

This is despite local authorities being offered money by the government to freeze bills.

However the Chartered Institute of Public Finance and Accountancy (Cipfa) survey suggested that the overall average increase would be less than 1%.

The Local Government Association said it had been a difficult decision for councils in the face of cuts.

Local authorities in England are being given extra money by central government for the third year running if they freeze bills.

But this time a larger number of councils are increasing council tax (41%) - last year 85% took up the government's offer.

Tight budgets

Cipfa said 102 out of 250 authorities surveyed planned to put up council tax in April, typically by about 1% percent.

Any increase over 2% percent is supposed to trigger a local referendum - but some councils are finding ways to increase it by more than that without a poll.

These councils have taken legal advice and plan to use a loophole that allows them to increase waste and transport costs by more than the 2% cap. Others have opted to put up taxes by 1.99%.

Start Quote

All councils are having to strike an increasingly difficult balance between protecting hard-pressed taxpayers and maintaining local services”

End Quote Ian Carruthers Director of policy, Chartered Institute of Public Finance and Accountancy

A small number of authorities are managing to reduce council tax by finding more efficient ways to deliver services.

Regional variations included an average 1.2% rise across Yorkshire and Humber, and a 0.1% increase in London.

Cipfa director of policy Ian Carruthers said tight budgets meant councils had to make difficult choices between tax rises and cuts in services.

"Councillors must take council tax decisions based on local priorities," he said.

"As the pressures from this period of unprecedented austerity intensify, all councils are having to strike an increasingly difficult balance between protecting hard-pressed taxpayers and maintaining local services.

"The imminent changes to local authority funding systems are bringing added uncertainty to councils' financial management and making it more difficult than ever for councillors to take the medium and longer term decisions required."

Communities Secretary Eric Pickles said the small average increase across England meant it was "a tax cut in real terms".

'Fully accountable'

A Local Government Association spokesman said: "This has been a tricky decision for councils.

"Collectively local authorities are facing a 33% cut in funding from government at the same time as the cost of providing services like adult social care is climbing through the roof.

"The council tax grant from government is very small when set against those pressures and it lasts just two years with no certainty beyond that.

"Ultimately councils have to take a long-term view. Some have clearly decided that increasing council tax is one way of meeting current costs and alleviating pressure in the longer term.

"Councils are fully accountable to their electorates for these decisions."

The Conservative leader of one council putting up tax - Canterbury City Council's John Gilbey - told BBC Radio 4's Today the government subsidy was for a limited amount of time.

This meant, he said, that when the extra money to freeze council tax ended, "you're still losing that permanent element of a tax base".

He added: "Don't forget we've got no compensation now, ever, for inflation. Our services, cost of services are going up, we're determined to keep a high standard of those services as long as possible, and also, in the end, to keep services going."

Asked about being a "democracy dodger" by increasing council tax by just below the 2% trigger for a referendum, he said that holding such a vote would cost up to £200,000.

He questioned why the government set the 2% trigger level if they were not happy for councils to go up to that figure.


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  • rate this

    Comment number 40.

    Can Mr. Pickles please explain how an increase in tax amounts to a 'real terms cut' when real wages have not gone up????

  • rate this

    Comment number 39.

    If you take off the cost of wacky diversity projects, town twinning and curtural offices, and only charge for the REAL and WANTED services we can all have a council tax cut!!

  • rate this

    Comment number 38.

    Isn't it amazing at how shiny and new most council offices are and yet how ragged and tired most A&E departments are?

  • rate this

    Comment number 37.


    It's not perfect, but it's better than a system that charges pensioners, the unemployed, and the low paid the same as a married couple each earning a higher tax bracket income.

    In the long term I'd like to see capital gains rolled into income tax, which would cover the situation you mentioned.

  • rate this

    Comment number 36.

    Pickles is wrong. This is not a "Tax cut in real terms" becuase it is lower than the inflation rate. It is only a cut if it is less than your annual pay rise.

  • rate this

    Comment number 35.

    If local councils do feel the need to increase council tax then they should provide sound evidence that they are attempting to cut costs. No one will agree with their action if they continue to pay their senior staff ridiculously high salaries and provide fact-finding jollies to far flung corners of the world!

  • rate this

    Comment number 34.

    9. SaveourCountry

    The cycle lanes in Brighton & Hove are being paid for by central government, not the council. Your council tax hasn't paid for this.

    If Eric Pickles is prepared to offer councils an extra £1.2m each, why does it matter if they freeze council tax? That way, councils can keep far more services.

    It's appalling manipulation of local government.

  • rate this

    Comment number 33.

    6 - Farkyss, I used to think this too until I realised that there are many wealthy people not on PAYE that would pay less tax because they don't declare all their income. I have friends who get loads in tax credits when I get none and yet they are far better off than me it's just they don't declare all their income. They're getting away with it once, to get away with it again is not acceptable

  • rate this

    Comment number 32.

    @26.Richard the Third
    If you can afford a 300% rise on your council tax then by all means offer to pay them more, for me that sort of rise would equate to almost £500 a month just for council tax and that I certainly could not afford on top of mortgage and all other bills. Your comment is both ridiculous and uneducated.

  • rate this

    Comment number 31.

    Stoke on Trent will eventually need to put theirs up to pay for the new £40m Civic Centre it is planning to build.

    It is completely unnecessary and unwanted and is perverse at the time when many in the area are struggling.

  • rate this

    Comment number 30.

    Would someone like to tell us where we're supposed to find this extra money?!

    My mother (in her 50s) is already in debt each month because she doesn't earn enough (working for Sainsburys). She doesn't smoke, drink or have Sky or similar services and is now faced with a rise in rent/CT of £100+ pm - but because she earns just above the threshold for benefits she can't get any benefits!!!

  • rate this

    Comment number 29.

    My council put up resident's parking permit costs by 100%, which equals a 3.5% rise in 'council charges'
    'Council Tax Freeze'?
    Yeah right

  • rate this

    Comment number 28.

    Mum been moaning all week that her pension rise of £40 per month has been taken entirely by a matched increase in her rent . Cut out the middle and just send heaps more money to local authorities who distribute it to for-profit organisations to deliver half-hearted services for which they are £40 a month x millions better off than last month.

  • rate this

    Comment number 27.

    I hope all my council tax gets spent on diversity training.

  • rate this

    Comment number 26.

    Come on, we've been getting away with low council tax for years. I think to meet the real cost of local government CT should rise by about 300%. We are ALL earning so much more than we used to and so we can all afford it. It's just that some folk are pure selfish and want to hoard their money instead of paying their dues. Now pay up and stop complaining.

  • rate this

    Comment number 25.

    You must remember that Councils are run by amateurs. Although they manage, in many cases, £hundreds of millions they have no business acumen whatsoever and therefore waste a great deal. You have Chief executives on £150,000+ per year, with their up to ten 'assistants' all on £100,000+. The waste on useless projects (and people) by councils is scandalous.

    Councils should be funded centrally.

  • rate this

    Comment number 24.

    I wouldn't mind so much IF i was being told how much I need to pay. Yes I claim council tax benefit but I do work part time (so not a total scrounger incase that's what you were thinking). I've been asking my local council for weeks how much they will be wanting extra off me for council tax and rent however they will not tell me (how can I budget?) I'm sure they will tell me when it is overdue!

  • rate this

    Comment number 23.

    Councillors were elected to do the budget. If you don't like it elect someone different next time.

    It's ridiculous to set an 2% level above which a referendum is required, then claim that councillors are "dodging democracy" setting a rise less than this.

    What if the council really wanted a 2.1% rise. Spending £200,000 of our money to validate an extra 0.1% makes a mockery of democracy.

  • rate this

    Comment number 22.

    Councils have been taking liberties with public money for years. Not once have they succeeded in reducing the cost of their service always adding inflationary increases as a minimum. My local council does not even have a visitors car park, it is all kept for the staff despite it being obvious there will be many visitors, who are required to use pay and display. Self serving paper shufflers.

  • rate this

    Comment number 21.

    The chief executives of some councils are paid more than CEO's of major companies.


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