Research put together by the County Councils Network has outlined that 95% of councils that have already outlined their budget proposals, are planning to increase their council tax by the maximum amount permitted.
Despite councils around the country seeing an emergency government funding boost of £600 million last month, which came after continuous lobbying from local authority representatives, many councils are still continuing to struggle under financial pressure. In response to these challenges, leaders of county councils around the country have stated that, whilst they recognise that the cost of living for residents will increase with rising council tax, the increases are necessary to protect vital services and prevent financial insolvency going forward.
With a general election in the not-too-distant future, the County Councils Network has made the case for the government to establish a long-term financial plan for local councils.
“No council leader takes the decision to raise council tax lightly”
The research, part of CCN’S annual council tax tracker, has found that:
- Almost every council is planning to raise council tax by a maximum of 4.99% for the next year, with none of the authorities that have set out their proposals declining to increase their council tax.
- The number of councils that are planning to increase council tax by the maximum amount is significantly more than those that did in 2023/24, with last year only 75% intending to do so.
- Changes identified so far will see the average Band D household facing an increase of £103 on average over the course of the year, however, this will vary depending on the area.
- 67% of county council funding comes from council tax, with this being higher than the national average of 56%. Some local authorities see up to 80% of their funding coming from council tax, due to them receiving less funding from government grants than other authorities.
Vice-Chair of the County Councils Network, Cllr Sam Corcoran, said:
“This year councils have faced extreme financial pressures, with local authorities having to make some of their toughest decisions ever due to rising costs and spikes in demand for care services. Last month, the government provided a very welcome £600m of additional funding for councils. This will make a tangible difference to protecting valued frontline services and in easing the pressures we face.
“Despite this, county authorities still face a £1.1bn budget shortfall over the next two years. With council tax now accounting for two-thirds of the average county authority’s funding, we have little choice but to take the difficult but necessary decision to raise council tax by 4.99% to continue to protect services and ward off the threat of financial insolvency in the future.”
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