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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  • Comment number 380.

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

  • rate this

    Comment number 379.

    Why do we need a local council and a country council? Surely that is one massive cost saving. On top of that why should i pay for

    1. more council tax for more social housing taken by people that have not even grown up in the area?

    2. managing Gypsy sites?

    3. Managing car parks and for car park inspectors, understand if they were free.

    4. Roads when we pay raod tax?


  • rate this

    Comment number 378.

    Communities Secretary Eric Pickles said the small average increase across England meant it was "a tax cut in real terms". Nothing is but thinking makes it so...

  • rate this

    Comment number 377.

    I don't mind paying for things when I know what I am getting. I want more transparency on what is spent.

    I suspect that much more is paid for goods and services than is necessary.

    I also want to know how much they fail to collect..if I am paying I want everyone to pay.

  • rate this

    Comment number 376.

    Was looking at my local council/county council.
    About 1/3 of all council tax goes on Adult Support Services
    About 1/3 of all council tax goes on Education/Childrens Services
    Everything else (including council tax benefit/housing benefit) is within the last third.

  • rate this

    Comment number 375.

    #364"councils are exempted from productivity and efficiency in terms of management and organisation.." Paradoxically, this government seems totally incapable of realising that by cutting public sector staff, (LAs/Civil service), they are making these bodies LESS efficient, with less skilled staff being overworked. West coast line tendering fiasco is a good example. Just using LAs as scapegoats.

  • rate this

    Comment number 374.

    @356. Frank Church
    Earn 20k, 15k after income tax, 7k after housing, 5k after local tax, 2k after food 1k after clothing, 0 after paying to go to work.
    Paid (not earn) 1million, most of the basic other costs need only be similar (apart from tax - which is lower). Who can afford life easier? The low paid work more hours and harder but don't know the right people.

  • rate this

    Comment number 373.

    Councils are horribly wasteful, with top managers responsibility-shy and overpaid, in general.

    Barely a week goes by in our area without reports on some stupid study or initiative undertaken by the Council to prove something patently obvious. All too often, they half-do jobs that don't need doing, so they can stay going back and doing it for the boys and girls.

  • rate this

    Comment number 372.

    It is who you know, nothing else
    So who did all these wealthy footballers know? Or perhaps you only mean people you don't like.

  • rate this

    Comment number 371.

    My local council refused a 1% Government increase and decided to hit residents with a 2%. Utter greed. The services you pay more for now 50 times worse than 10 years ago. No locl police station, pot holes everywhere, damages pavements - A total mismanagement of money in a grand scale

    Its like getting you car washed 5 years ago for £5 for good job, now they charge £8 and only wash half of it.

  • rate this

    Comment number 370.

    Bury MBC are increasing Council Tax by 3.5%....Labour run and will be kicked out at the next local election if people have any sense !!
    They haven't got a clue !!

  • rate this

    Comment number 369.

    Wrote a complaint about the bin collection service.Said it was ridiculous not only they collect twice/month but they don’t bother collecting your bin if u forget to move it 1yard away from the wall(no garden/fence/wall/steps in the way).The man said“it’s the policy”.it’s not only how our money r spent but also the council’s attitude towards people they are supposed to give a service to

  • rate this

    Comment number 368.

    Communities Secretary Eric Pickles said the small average increase across England meant it was "a tax cut in real terms".
    Eric Pickles - the man most likely to use any excuse to explain an increase...

  • rate this

    Comment number 367.

    This is local Councils using loopholes to get rises instead of making efficiency savings set by the Government. Oldham Council is one such culprit, and the councillors there should be ashamed of themselves.

  • rate this

    Comment number 366.

    I don't. Just don't say that taxing those with bigger houses more is 'fair'

    Fair or not it is necessary. We can't keep taking from people who have nothing already. That's 13th century thinking.

    Until the majority earn more (unlikely) the wealthy should be taking the brunt of the hit, they've not taken any significant hit so far, whilst the majority are being squeezed and squeezed.

  • rate this

    Comment number 365.

    It was inevitable they would increase it because more unemployed people means less tax grab for the councils. As with everything else in this wretched country though, it falls on those who do work to pay the shortfall. There's just going to be nothing left to live on for workers!

    I already pay way more than average because my house is a high band, get lost and stick your snouts in another trough!

  • rate this

    Comment number 364.

    Councils seem to be the worst in transparency. Even the most complex private organisation has annual financial results people can see where money comes from and goes out, but not councils. Also, it seems councils are exempted from productivity and efficiency in terms of management and organisation. It is time for changes in these.

  • rate this

    Comment number 363.

    Most of us have made decisions based on having less disposable cash to spend. Those decisions might be categorised as, "Essential" "Desirable" "Nice" to have. A 62 plate BMW X5 in a rural county without a motorway is not what I call "Essential" when a Skoda 4x4 would doe the job just as well at less cost to the local taxpayer

  • rate this

    Comment number 362.

    To all the ignorant comments made here about council salaries, they are largely very very low. I agree that management salaries are too high and need slashing drastically, but your average public servant is on a pitiful wage, which has been frozen for years and usually been cut in a last few years. A minority of highly paid managers does not represent the majority on poor wages.

  • rate this

    Comment number 361.

    There's been freeze on Public Sector pay for a few years now, so, to all intents and purposes, the majority of LA employees will have had what amounts to a 15% pay cut.


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