Council Tax Hikes: What You Need to Know

Numerous local councils in the UK are poised to raise council tax, with some planning to increase rates by as much as 10 percent. This will result in the average council tax bill for a Band D property rising by £84 starting from April. As a result, many households will see their annual bills exceed £2,000, thereby placing additional strain on already tight budgets.

The maximum increase allowed without a referendum is 4.99 percent, and several councils have opted to implement this maximum amount. However, Birmingham City Council and Thurrock Council have been granted special permission by the Government to impose even larger increases of 9.99 percent and 7.99 percent respectively. A convenient postcode checker tool has been made available for residents to ascertain the extent of their bill increases.

A survey carried out by the Local Government Association revealed that nearly one in five councils foresee the need to issue a section 114 notice due to a funding shortfall. Councillor Shaun Davies, chairman of the Local Government Association, emphasized the urgent necessity for the Government to address the mounting financial crisis confronting councils and to establish a long-term plan to adequately fund local services through multi-year settlements.

Research by the Local Government Chronicle has identified five councils that have proposed increases below the cap. For example, in Rochdale MBC, council tax is set to rise by 4.99 percent, but all households will receive a one-off two percent discount for this year. Likewise, in Hartlepool BC and Tower Hamlets LBC, council tax will increase by just under 2.99 percent alongside the social care precept, with relief funds accessible to low-income households.

Both Nottinghamshire and Stockton-on-Tees have proposed increases just below the referendum cap at 4.8 percent and 4.95 percent. A spokesperson from the Department for Levelling Up, Housing and Communities has assured that an additional £600 million support package has been announced for councils across England, increasing their overall funding for the upcoming financial year to £64.7 billion – a 7.5 percent increase in cash terms. The spokesperson also underscored the need for councils to be mindful of cost-of-living pressures when setting council tax levels in light of these increases.

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