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 560.

    551.Moneydude "Working in the public sector, I haven't had a pay rise in 4 years.... So they aren't giving more money to employees!"

    Stephanie Flanders' blog ((30/11/2012) reveals public sector pay is roaring ahead - 9% rise in earnings per head over the last two years. Private sector wages fall further and further behind. Austerity has been, essentially, an entirely private sector phenomenon.

  • rate this

    Comment number 559.

    @549.Eddy from Waring

    Publically funded pensions are just a tax on the following generation.

  • rate this

    Comment number 558.

    @556 Dumpthecar

    I don't know if you have noticed but the private sector is really struggling at the moment. At least I have a job!

    I was commenting within a forum thread discussing increases in council tax, and my pay freeze is relevant to the discussion.

    I am eternally grateful to have a full time job in today's climate.

  • rate this

    Comment number 557.

    We need a local income tax.That would make these useless bureaucrats learn some thing about the real world.That said in most cases the locals vote these people in because of their political views.

  • Comment number 556.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 555.


    Excellent, another overpaid public sector jobsworth getting his just desserts then.

  • rate this

    Comment number 554.

    @549.Eddy from Waring

    Privately funded pensions are fine. Publically funded pensions are just a tax on the following generation.

  • rate this

    Comment number 553.

    535. BLACK_PEARL
    My Local council considering dispensing with the school 'Lollipop' service, apparently costing £80 grand !

    Now there's the problem. A quick google search tells me that £7/hour and 7 hrs/wk (term time obviously) is about right so there are either a lot of crossing patrols or a massive overhead. Where does the rest of the £80k go?

  • rate this

    Comment number 552.

    The local government minister Eric Pickles like a lot of ministers before him has already carved out a job for the future in this case employed by a local government

    They have earmarked him to replace a roundabout on the A34 just out side Oxford

  • rate this

    Comment number 551.

    Working in the public sector myself, I haven't had a pay rise in 4 years....and this trend looks set to continue into the future.

    My salary 4 years ago was a nice salary........just on the average pay scale for my profession. Since then it has been eroded by 4 years of that is about a 20% pay cut in real terms.

    So...... they aren't giving more money to employees!!!!

  • rate this

    Comment number 550.

    "Any increase over 2% percent is supposed to trigger a local referendum"

    Can anyone help me on the details of this? Who can vote? I suppose logically it would be just those who would actually have to pay the proposed council tax? Or is it everybody on the electoral roll? Or are there some other criteria?

  • rate this

    Comment number 549.

    It seems some people think that there should not be any jobs at all for our young to take, anywhere in the economy, public or private sector, which include as part of the contactually agreed remuneration, anything like a liveable occupational pension.

    Talk about the politics of envy. Get out and fight for a decent pension yourselves.

  • rate this

    Comment number 548.

    Personally I wouldn't object to paying a little more but there is so little detail about what they spend it on why should we pay more.

    Zero pay rises for the public sector employees earning over £40K for the next 5 years.

    Make their pensions career average, not final salary.

  • rate this

    Comment number 547.

    @535. BLACK_PEARL
    The two climate officers are friends of the council leader, the lollipop ladies are plebs.

    My local council cut a bus service it claimed was costing 90k subsidy a year - I offered to buy a bus and run the whole thing free of charge to the user for 80k and was told no. I would have been quids in as well.

  • rate this

    Comment number 546.

    537. Jaw dropping truth

    Cheerleading development officer ... mentioned in a speech by Pickles but has proved 'surprisingly hard to pin down' ever since. In the same speech he also jeered at a council's 'Waste strategy awareness officer ' ... who has saved the council £500 000 in his first year by re-working their landfill operation and costs.

  • rate this

    Comment number 545.

    Local councils ,like national government have completely lost touch with reality since the days of uncontrolled expenditure during the past decade.Overpaid staff with massive public funded pensions leave he average worker struggling to make ends meet, local tax rises will squeeze the good and honest worker even further.
    Life ain't fair and never has been.

  • rate this

    Comment number 544.


    "...we do anything & everything the EU tells us over here..."


    No "we" don't. The fact that our Government has just had to repay nearly 100 million euros wrongly given to farmers or whoever, and "we" sold horsemeat labelled as beef shows that quite clearly.

  • rate this

    Comment number 543.

    My employer giveth, the governemnt, utility companies et al doeth their best to taketh it away.

    The other day I read a story about how we should all be putting more aside in provision for our old age.

    That made me laugh, at the speed at which the cost of living is rising, the UK will be one massive debtor's prison in 20 years time.

  • Comment number 542.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 541.

    537 If you are not making these up to entertain us then it's a disgrace that councils are thinking of putting taxes up before dropping these posts.
    535 Agree Lollipop service more important than such as the above this is why councils get a bad name


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