Council Tax Bills to Increase by Over £100 in April Amid Cap Freeze

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Families in England are bracing for significant council tax hikes in April, as the government confirms a cap on increases will remain at 5 percent. This move sets the stage for bills to rise substantially, with the average family facing an increase of more than £100—almost three times the current rate of inflation.  

 

Sir Keir Starmer’s press secretary clarified the government’s stance during a briefing on Wednesday, stating that the threshold allowing councils to raise taxes “isn’t changing.” This confirmation follows an exchange in the House of Commons, where Conservative leader Kemi Badenoch pressed Starmer to confirm whether the cap would be altered. Although Starmer avoided directly addressing the question, his press secretary later reiterated, “The threshold remains the same.”  

 

Under the unchanged cap, local authorities can impose a rise of up to 5 percent without requiring a referendum or special government permission. This increase far exceeds the current inflation rate of 1.7 percent. For the average band D property, council tax bills are set to climb to £2,171 for the 2024–25 financial year—an increase of £106 compared to the previous year. Households in the highest band, band H, will see even steeper hikes, with last year’s £4,342 bill rising by £217.  

 

In recent years, council tax increases were limited to 2.99 percent, with an additional 2 percent permitted for councils managing social care responsibilities. However, the ability to raise taxes by up to 5 percent has become critical for many local authorities. A survey by the Local Government Association revealed that one in four councils anticipates needing emergency financial support to avoid bankruptcy within the next two years. Despite this, some councils may hesitate to implement the full increase, given the upcoming local elections in May.  

 

Tim Oliver, leader of Surrey County Council and chairman of the County Councils Network, acknowledged the budget allocation's marginal benefits but emphasized that it falls short of resolving broader financial challenges. “The money does not eradicate councils’ funding gap,” Oliver explained, pointing to rising costs driven by the new minimum wage as an additional strain. “Therefore, councils will have little choice but to raise council tax and still will need to take difficult decisions over services to balance their budgets.”  

 

As local governments grapple with financial pressures and essential services hang in the balance, the decision to freeze the cap on council tax increases underscores the ongoing tension between fiscal responsibility and meeting community needs. For many families, the rising costs represent a growing burden amidst already challenging economic conditions.

 

Based on a report by The Times 2024-11-16