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 180.

    They talk a lot about pressure on essential services etc. How is it then that they manage to maintain their pet projects in diversity, green energy etc? When a private company faces difficulties projects are usually put on hold until easier times. Not so for our councils which seems to be an extension of University for many of the managers.

  • rate this

    Comment number 179.

    @136 quartz

    "Increase efficiency, or increase a number. Tricky one."

    I work in local government as a Bridge Engineer. When I started in 1999 here we had 37 people looking after one countys' bridge stock. The county was divided into 2, so say 18 people each county (for simplicity)

    We now have 7 people in my department. 18 - 7 = 11 people do the SAME work!!!!!!!!!


  • rate this

    Comment number 178.

    The wealthy simply aren't paying their share. It's time the homes of the wealthy were taxed in accordance with their vast incomes. Why is it OK to take about 8% of my income in council tax but only a tiny % age for a very wealthy person? It doesn't make any sense. As usual the middle gets squeezed to pay for everyone else.

  • rate this

    Comment number 177.

    This is a con. When this sort of one-of grant stops, the councils who accept it will find themselves skint and having to raise money from a very low starting base.
    This is all a bit like the top-down Stalinist interference with the NHS, which of course we were promised, in the manifesto, would never happen.
    It's a big sick joke Pickles, give the money back to the Chancellor. He could use it.

  • rate this

    Comment number 176.

    The CEO of our LA is paid over £250,000 a year i.e. about 2.4 times the Prime Minister and he is a complete waste of space. The Council meetings are like the monkey house at the zoo. To cap it all they have just built themselves a new Town Hall and refuse to disclose the accounts - clueless, incompetent and greedy. No point in voting the other lot in, they are just as bad.

  • rate this

    Comment number 175.

    Councils shouldn't be run like corporations, and corporate levels of managerial pay shouldn't apply to the people running them - plain and simple. They're not in the business of making profits and building wealth, they're in the business of spending money on behalf of their residents. Well guess what - the residents are running out of money, so spend less.

  • rate this

    Comment number 174.

    @141. Pete
    Because it is pointless to vote in council elections.
    There were 2 seats in my local ward last council election. 4 stood. 2 Conservative, 2 independent (including me).
    Result Conservative 1 & 2 despite the massive increases in tax, the poor services and the well published wastes of money.
    People just vote the same everytime without thought. We don't have democracy we have stupidity

  • rate this

    Comment number 173.

    Council Tax is too hard to collect, isn't fair and unfairly punishes low incomes.

    We need to consider revenue as a whole across the state - if income tax has to increase to reduce/abolish the other indirect and local taxes, then so be it. Businesses need to start paying corporation tax in full or we should implement a turnover tax instead.

  • rate this

    Comment number 172.


    what do you think council tax pays for ? maybe you need re educated. watse/lighting/schools/police/rubbish collection/ mains water supply etc etc. why on earth would a landlord be liable for the service to a property when the tenant use the facility. what utter tripe.

  • rate this

    Comment number 171.

    Mike Solomons

    "We moan about, for example the cost of keeping our streets clean, grass mown etc, but never ask local citizens to volunteer to do this work"

    I would rather ask my local councils Asst. Strategic Director(inward focus), Asst Strategic Director (outward focus ) , Equalities and Diversity coordinators and Route to School planners to cut the grass .

  • rate this

    Comment number 170.

    if councillors NEED so many overpaid ADVISERS, surely they are not competent enough to do their OWN JOB

  • rate this

    Comment number 169.

    Today I was listening to a proramme on the Radio someone said something which made me realise we need to highlight that there is more to England than London and also that there is more than Councils and their staff in any given area of the UK..

  • rate this

    Comment number 168.

    What ever happened to the promised transparency?

    My council deal behind closed doors as it's "commercially sensitive". Donated £30m to a private company (our tax!) and are making £40m public spending cuts

    The council gets voted back in and it won't change until people wake up and take responsibility.

    There's no easy solution, however complete transparency would help me appreciate their work

  • rate this

    Comment number 167.

    123.ian williams
    What about the 'engineered' payoffs for council executives...

    Indeed. Thatt needs to stop.

    We also need to stop the cronyism lower down the ladder which stifle efficiency. I know of a person who is employed in a "health and safety" admin role in my local council. However I know full well they are useless at the job and only got the role because they "know someone..."

  • rate this

    Comment number 166.

    Council taxes reducing in price would be real news....

  • rate this

    Comment number 165.

    How about the government re issuing the Bradbury pound instead.

    If they create it and offer a 0% interest like during WW2 then they wouldn't need to put up council tax.

    Oh yes the BANKERS wont let them

    worked for the germans after WW2 and made their economy go from zero to hero

    Also it worked for the USA with their Greenback note

    Google "BRADBURY POUND" and cast your own opinion

  • rate this

    Comment number 164.


    "Council tax is a disaster but the poll tax was also totally stupid. The unemployed and pensioners paying the same as billionaire bankers? Bonkers."

    The "poor" weren't annoyed about what they were paying, they were annoyed because the "rich" weren't getting screwed! Politics of envy as usual!

  • rate this

    Comment number 163.

    I guess this one is a tough one to swallow because I'm not clear on the value for money. The only improvements I've seen are ridiculous things like a sign that says "Welcome to Dacorum" and little flags on the lamp posts. If this is what my £120 per month + new rate increase will be going towards, instead of council SERVICES, then I think they should GTFO with that.

  • rate this

    Comment number 162.

    The councils of the country need to look at their charges. I know someone who works in address management and I know a 180 housing estate cost just £3000 to put in a planning application. If approved the housing developer will earn millions while the council get not much (apart from the small % profit of new council tax).

  • rate this

    Comment number 161.

    Council Tax should be paid by the owners of residential properties, not by the tenants. The standard of local services is intimately linked with the value of residential property, so this is yet another tax on the poor to reward the rich.


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