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 300.

    7 Minutes ago
    Formerly in business, now in local govt service, I know that our 2 doz county hall staff each costing £100K+ pa would struggle to hold down equivalent-paying private sector jobs. Paper pushers all, with no original ideas!
    So you include yourself in that generalisation then?

  • rate this

    Comment number 299.

    Addendum to my 282 entry, the one thing the council can't do is get our residents who make a mess to clean up after themselves. They drop all kinds of litter on the streets, they spit chewing gum on the ground, they do fly tipping, they mess up the beaches (as do tourists), they let their dogs do their business anywhere. Take pride in where you live, councils save money which helps the community.

  • rate this

    Comment number 298.

    226. Kitten Whiskers
    Why do people talk about tax as if its a bad thing???

    We all benefit from it people! Raise Council Tax much more I say...."

    Well, I don't think a fair tax, wisely spent, is a bad thing at all.

    The problem is that the council tax is not a fair tax, and is the least wisely spent tax of all. So, it needs cutting

    Councils need to get back to providing basic services only

  • rate this

    Comment number 297.

    Unfortunately there are some local Councils, like Nottingham City, who as a matter of principle will jack the tax up by the maximum possible without triggering a referendum, even (or especially) when central government have offered to subsidise a freeze.

  • rate this

    Comment number 296.

    Add to this the income from the sick, disabled & unemployed who previously were exempt from most or all of council tax

  • rate this

    Comment number 295.

    the wealthy are wealthy because they worked hard for it. Don't like it, then work harder!

    You are living in fantasy land. Nobody rch has money in proportion to effort.
    The wealthy are so due to advantage, prejudice and risk taking. They do not work harder; just take more advantage.
    If effort was rewarded then the world would very different .

  • rate this

    Comment number 294.

    I wonder how much it cost in legal fees to get around the 2% cap?

  • rate this

    Comment number 293.

    Councils have suffered massive funding cuts under this government . If there are rises then blame the government NOT the Councils.

  • rate this

    Comment number 292.

    The pot hole comments are just. I live in a wealthy area and you think we could manage to scrape the money together to fix a road full of craters quickly that a large primary school is on. It took 3 weeks for the record and its lucky no children were injured by people avoiding the craters. So you cant even save money buy buying a small fuel efficent car as you would die/disapear in a pot hole.

  • rate this

    Comment number 291.

    Formerly in business, now in local govt service, I know that our 2 doz county hall staff each costing £100K+ pa would struggle to hold down equivalent-paying private sector jobs. Paper pushers all, with no original ideas!
    As for the taxpayers - forget fuel poverty; council tax is my biggest bill after the mortgage and increasingly unaffordable. Time for top-down value-for-money audits all round.

  • rate this

    Comment number 290.

    2 Hours ago
    The tax system is so complex that unpicking it will take time. It means removing tax-avoidance mechanisms that have been 'sold' to the masses as 'good', such as tax-free allowances and tax credits.
    Why waste money 'unpicking it' start with a blank sheet & write a NEW set of rules without loopholes & swap over on 1st of April....

  • rate this

    Comment number 289.


  • rate this

    Comment number 288.

    This a scandal, i challenged my council tax via utility bill helpline and had my property re-banded, apperently the valuation office just bunched all the houses on the street in one band, but my next door neighbours house is twice the size...not having that!

  • rate this

    Comment number 287.

    The Prime Minister is paid £142,500 but according to Essex County Council's Pay Policy Statement the Chief Executive of has a maximum pay of £210,000. (I don't know what they are actually paid).
    Surely running one county is not worth £67500 more than running the whole country?
    Assuming other councils are the same, is it any surprise that council tax goes up?

  • rate this

    Comment number 286.

    "I'm beginning to think being on the welfare system is a better bet. . . . " sorry, Stereotonic, it isn't. You are forced into poverty and made to feel a scrounger because 20+ years of professional work (& contributions to the state) apparently don't outweigh the temerity of not having a job despite countless applications/interviews. Each day's a struggle to even feed the family.

  • rate this

    Comment number 285.

    Always rely on a council story to get the right wing savages out of their dreamworld. I wonder how many have worked in a council, or anywhere else? You berate councils for 'waste', and yet they try to do their duty with huge budget cuts looming.. I expect councils would love to have had the same financial treatment as the banks, you know, those great and efficient private sector 'succeses'.

  • rate this

    Comment number 284.

    The London Borough Of Barnet has just spent half a million pounds on consultants while slashing frontline services and getting rid of loyal, committed and competent staff. - so that's where the money's going, and why they need to increase council tax. Methinks Barnet are not alone in this...

  • rate this

    Comment number 283.

    Simple, servicing debt!

  • rate this

    Comment number 282.

    I have a council who have frozen the council tax again this year, I live in a street where the council send a road cleaner once a week, sometimes twice a week during Autumn, they sort out repairs and problems fairly quickly, they trim the hedges & prune the trees every year, the road sweepers sweep the roads.

  • rate this

    Comment number 281.

    PS (re#241 below). My Council Taxes in Corfu are €23.59 every 2 months. My Local Authority Water Bill is €35 every 4 months for drinking water that is fully up to EU standards (unlike yours).
    We understand that these bills are going DOWN next year as they made too much profit !!,
    Not everything in Greece is crazy. Local Authorities (truly LOCAL) are extremely efficient


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