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 140.

    I’d like to see every increase in council tax trigger a similar % reduction in senior management’s wages and a zero bonus payout.

    Somehow I think they’d figure out a way to make better use of their resources

  • rate this

    Comment number 139.

    @122, Nick. It's because you made the same typo (well I assume it was a typo) twice now. Something about one of your council services being shut every week. Except you had an alternative spelling of the word shut. ;)

  • rate this

    Comment number 138.

    Paying council tax is nothing in my country. Decent income tax, lump sum pay back of pension funds plus interest (5-6%) every year till 55. Low utilities bills as all the energy sources are nationalised. Free or less than a single £ for medical expenses at government hospital.

    Really struggle to live in this country. Shivering all the time afraid of turning on the heater and worries bout bills!

  • rate this

    Comment number 137.

    Most of government loses money because every thing they do as to go out to consultants before it goes anywhere and this is same in many councils as no one seems to make a commonsense decision without a consultant saying that it is a good idea
    Councils are also having to work out how to cover the extra cost pushed on to them by government law changes

  • rate this

    Comment number 136.

    Increase efficiency, or increase a number. Tricky one.

  • rate this

    Comment number 135.

    England is Ruined

    If England is really in any sense Ruined then outsourcing public services is a contributory factor.

    Outsourcing companies make a profit by driving down quality of service and the wages of those actully doing the work. This means our taxes now pay for worse public services and have to subsidise those workers who don't earn a living wage.

  • rate this

    Comment number 134.

    I wonder how many of the councils involved are Labour councils. As was once well said, the problem with socialists is that they always run out of other people's money.

  • rate this

    Comment number 133.

    So what? Thousands of us will be spending all our incomes on fuel to keep warm within the next few years at the rate of energy tariff increases. This is just one more nail in the coffin (pseudo-Socialist Tony Blair and his ilk, please note). Just as well God has provided an opt out clause!

  • rate this

    Comment number 132.

    I wish somebody could explain to me why Councils tell YOU that they are reducing their services whilst increasing their council tax payments? I suggest everybody apply for a position in RBS as these muppets can do NO WRONG! They can loose over 5 billion pounds & be awarded a million bonus for their efforts! STAGGERING isn't it! I'm off to count how many councillors it takes to change a light bulb?

  • rate this

    Comment number 131.

    My almost bankrupt council "West Somerset District Council" has just employed a "Vision Manager" - Salary £25 - 30K per annum, hours: 37 hours per week.

    They will incur my wrath... if they dare to increase my council tax.

  • rate this

    Comment number 130.

    If councils want even more money, they need to be able to demonstrate how what they are already being given is used to our benefit and according to our wishes.

    They should set the budget after the May council elections, so that candidates can lay out what they'd like to do and be elected on the strength of it.

  • rate this

    Comment number 129.

    I wonder what we would unearth if ALL councils were made to publish each and every item of expenditure so the taxpayer could see where their money goes. And I mean everything, right down to the last paper clip. Make them have the culture shock of at last having to be responsible for their actions just as we have the shock of paying for their incompetent way of running a business.

  • rate this

    Comment number 128.

    Perhaps the coucil would have more money if they stopped wasting it on loads of bollards, "traffic calming" and speed humps that only serve to make it much harder to drive anywhere!

    And what does red tarmac even mean???!

  • rate this

    Comment number 127.

    @99 AlErgic "and many cultural diversity aspects put on hold during these times of austerity." While that may sound sensible, unfortunately Local Authorities HAVE to have Diversity Officers by law. (You can thank TB and Labour for all that)

  • rate this

    Comment number 126.

    The rich pay council tax, the poor pay council tax. For the rich it is a good deal, all those services for a tiny percentage of their income (even adjusting for house size) - for the poor it is a killer, literally.

  • rate this

    Comment number 125.

    I have my bin collected once a fortnight, dont use any of my council services, dont bother ringing the police (they do nothing anyway), cannot get a dentist in my area and i dont see anyone clean my garden after chavs throw litter on my property. Is the rise in my city money for value? You tell me. I may as well post my Pay cheque of to the Government and Local councillors as i see nothing.

  • Comment number 124.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 123.

    What about the 'engineered' payoffs for council executives i.e. early retirement, ill health etc. all arranged and agreed by colleagues. This may be a small fraction of the waste but until someone somewhere has the guts to stop council execs milking the system the abuse will go on.

  • Comment number 122.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 121.

    Councils may spend poorly and wastefully but come local election time, we vote based on........central government's attitude to the NHS, taxes, Cameron etc, none of which has ANYTHING to do with the local council and their remit of housing, roads, social care etc.

    Sometimes we get what we deserve.


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