Latest Public Sector News

06.03.17

Households face highest council tax rise in a decade, as LAs tackle social care shortfall

English households will face an average increase in council tax of 4%, the highest hike in tax rates since 2007-08, a report published by the Chartered Institute of Public Finance and Accountancy (CIPFA) has revealed.

The annual review of council tax was based on a survey which questioned 320 of the 446 authorities in England and Wales, asking authorities for details of their planned tax rises for the year.  

Though the report took into account contributions for police, fire, the Greater London Authority and those without social care responsibilities, it is thought that a considerable proportion of the rise can be put down to councils taking advantage of the maximum rise of 3% rather than 2% that the DCLG has allowed to help councils prop up a struggling social care sector.

The increase would lead to the average band D property’s yearly tax rising by £60.94 up to £1,590.53, as the survey also found that of the councils with social care responsibilities, 95% will be setting the social care precept rate at least at 2%, whilst 70% will be going ahead with the maximum 3% increase.

The rise is estimated to bring in a total of £554m extra cash for councils to put back into adult social care, which comes to 89% of the possible national amount of £624m.

The survey’s results are to be expected as councils battle to find extra money for a social care sector in crisis, which is dealing with high demand from an ageing population and a desperate need for care services.

Discussing the findings, Sean Nolan, director for local government at CIPFA, said: “The fact that we are facing the single highest council tax increase in a decade is all the more remarkable because it comes after six years (2010-11 to 2015-16) of very low increases, actively encouraged by government who until last year had offered a council tax freeze grant if councils did not raise theirs at all.

“The subsequent removal of this freeze grant shows a clear shift in public policy in general, but also a reflection of the strains being caused by social care pressures. We can expect these levels of increase to continue at least for next year.

“To find that over two-thirds of those councils with adult social care responsibilities will opt for the full 3% is another clear reminder of the current funding challenges.”

This latest report will add yet more pressure on the chancellor to provide fresh funding for adult social care in his Spring budget on Wednesday, as councils and authorities have called for an end to “sticking plaster” short-term solutions to closing the adult social care funding gap.

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