Tens of millions of individuals face a much bigger leap in council tax payments subsequent yr because of an announcement within the Autumn Assertion — however native authorities warned this could not plug a looming gap in native authorities funds.
Labour accused Jeremy Hunt of looking for to make councils “take the blame” for a brand new spherical of austerity after the chancellor gave authorities permission to raise council tax quicker.
Till now councils have been prevented from elevating annual council tax by greater than 2.99 per cent with out a native referendum.
Nevertheless, Hunt has given the inexperienced gentle to native authorities to mechanically elevate the levy — which is paid in line with the scale of a house — by as much as 4.99 per cent.
Rachel Reeves, shadow chancellor, stated the federal government was “forcing” councils to boost council tax, with the standard band D household house now paying greater than £2,000 a yr for the primary time.
“Native individuals . . . will likely be pressured to pay extra due to the destruction that the Tories have wreaked on our financial system at a time when councils are already in dire straits due to a scarcity of help from central authorities,” she stated.
“Now, they most likely sat round their desk in Downing Road, pondering this was some intelligent trick: make the councils take the blame.”
James Jamieson, chair of the Native Authorities Affiliation, stated the coverage wouldn’t by itself resolve “the long-term pressures going through companies — significantly high-demand companies like grownup social care, youngster safety and homelessness prevention. It additionally raises totally different quantities of cash in several elements of the nation unrelated to want and including to the monetary burden going through households.”
In Salford, the sixteenth most disadvantaged authority within the nation, a rise of 5 per cent — relatively than 3 per cent — would elevate £2mn, stated the town’s mayor Paul Dennett. This in contrast with £14mn in wealthier Surrey.
Patrick Melia, finance lead on the Society of Native Authority Chief Executives, warned the mechanism was “a massively imprecise” means of accelerating income “that can elevate wildly various quantities throughout the nation”. “There are only a few financial savings choices left,” he added. “You’ll be able to’t minimize companies twice.”
Tim Oliver, chair of the County Councils Community, added {that a} discount in deliberate funding progress from 2025 might be “extraordinarily tough” for native companies, which have been already beneath immense strain.
“Until authorities addresses inflation subsequent yr, and the financial system picks up earlier than 2025, councils’ funding shortfall will develop year-on-year and grow to be unsustainable.”
Rebecca McDonald, chief economist for the Joseph Rowntree Basis, stated households confronted a “scary impediment course simply to afford the necessities” this winter. “Rises in council tax, meals and rents are all wanting insurmountable for giant swaths of the inhabitants,” she stated.
Jonathan Carr-West, chief govt of the Native Authorities Data Unit, stated the Autumn Assertion supplied “restricted respite” for councils. “Nicely-run councils will fail until one thing modifications,” he stated.
Permitting authorities to raise council tax was a “regressive tax which can hit the poorest the toughest and shift political legal responsibility from central to native authorities”, he added.
