75 percent of councils forced to increase council tax by 4.99 percent in April

Three quarters of local authorities are set to increase their council tax by the maximum amount this April, according to new research from the County Councils Network (CCN).

The research found that 84 councils out of 114 who have published their 2023/34 budget proposals so far plan to raise council tax by the maximum permitted, which is 4.99 percent. These are upper-tier councils with social care responsibilities.

With inflation running at 10.5 percent, local authorities face multi-million-pound funding gaps that have built up and which they need to close to balance their budgets for 2023/24, CCN underlines.

Council leaders say they recognise the cost-of-living pressures for residents but have reluctantly put forward maximum rises because they have “little choice” in order to set a balanced budget and to fund vital local services.

The changes will come in for residents in April at the start of the new financial year. Councils are able to levy a maximum of 4.99 percent should they chose to do so – a total of 2.99 percent for general council tax and a further 1.99 percent for the adult social care precept, which is ringfenced for care services.

UK Government funding levels for 2023/24, particularly for care services, are predicated on councils taking the maximum council tax rise.

In total, 114 councils out of 152 have published their budget proposals for 2023/24.

Of the 114 councils, all bar one plan on raising council tax next year. A total of 84 of these authorities have put forward maximum rises. The remaining 38 councils have yet to declare their intentions. Three councils – Croydon, Thurrock, and Slough – have special dispensation to propose rises over 4.99 percent.

A total of 30 councils have put forward council tax rises but have declined to levy the maximum. These rates vary across the country with the lowest rise put forward at two percent.

The average Band D household will see their bills rise by £99 a year with a 4.99 percent increase, though this will vary across the country, CCN states. Split across a year, this equates to £1.91 a week, with councils arguing that such a rise is necessary to protect vital local initiatives and allow them to invest in improving public services.

Despite the government providing extra funding for councils in October’s Autumn Statement, which was welcomed by CCN, significant funding pressures, fuelled by inflation, still remain, the network warns.

Local authorities say that tax rises not only allow them to protect local services but invest in them too. Measures put forward by CCN’s member councils include increasing payments to adult social care providers to mitigate rising costs and for wage increases for carers, investment to create thousands of extra school places, providing more funding for vulnerable children in care, and investment in climate action.

Council tax also funds vital support for low-income individuals and households struggling with the cost-of-living crisis. Measures include council tax reduction schemes, the Household Support Grant that provides fuel and food vouchers, and investment into local charities and voluntary organisations.

Cllr Sam Corcoran, Labour Vice-Chairman of the County Councils Network and Leader of Cheshire East Council, said: “With inflation reaching levels not seen for over 40 years and with demand-led pressures for care services showing no sign of abating, local authority leaders are setting their budgets in the most difficult circumstances in decades.

“We all recognise the cost-of-living crisis is impacting on every household in the country and disproportionally on low incomes, but we have little choice but to propose council tax rises again next year, with many local authorities reluctantly opting for maximum rises.

“With councils facing multi-million funding deficits next year, the alternative to council tax rises would be drastic cuts to frontline services at a time when people at the sharp end of the cost-of-living crisis need us to be there for them. With the financial situation for councils looking extremely tough for the next few years, we will be calling on the Chancellor for further help in the March Budget.”

CCN recently worked with technology-enabled care (TEC) specialist Tunstall Healthcare to publish a joint report, which looks into the impact of digital technology on adult social care and the importance of implementing digital change across the care landscape.