By Vivienne Russell | 28 February 2013
Four out of ten councils in England are planning to raise their council tax from April, despite the offer of a government freeze grant, a CIPFA survey has revealed.
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In October, Chancellor George Osborne announced an extra £450m to help freeze council tax over the next two years, equivalent to a 1% rise in the 2012/13 tax.
But CIPFA’s annual survey found that 41% of authorities were planning to impose an average hike of 1.1%. This is well below the 2% figure that would trigger a local referendum on the rise.
With 59% of English councils agreeing to take the freeze grant, the overall average Band D council tax bill will rise by 0.8%, CIPFA said. This is the equivalent of £11.74 a year and compares to an average rise of 0.3% last year.
Just over half (51%) of billing authorities and a large majority (80%) of precepting authorities responded to the survey. CIPFA said that once all councils had set their budgets, the final outcome was not expected to change significantly.
CIPFA also highlighted considerable variation between regions, with the highest average Band D increase likely to be in Yorkshire & the Humber, where it is expected to rise by 1.2% or £16.30. In Greater London, where council tax fell last year, the average bill is set to rise by 0.1%, the smallest increase among the English regions.
Ian Carruthers, CIPFA’s director of policy, said: ‘As the pressures from this period of unprecedented austerity intensify, all councils are having to strike an increasingly difficult balance between protecting hard-pressed taxpayers and maintaining local services.
‘The imminent changes to local authority funding systems are bringing added uncertainty to councils’ financial management and making it more difficult than ever for councillors to take the medium and longer-term decisions required.’
Local Government Secretary Eric Pickles said the survey confirmed a 9.5% real-terms fall in council tax since the coalition took office in 2010.
Pickles said: ‘Council tax more than doubled under Labour. But this government has worked to freeze council tax for three years, helping hard-working families and pensioners with their cost of living.
‘This survey confirms that council tax will effectively be frozen again this year, with an average change across England of just a mere 0.8%. This is a tax cut in real terms.’
A spokesman for the Local Government Association said the decision over whether to accept the government’s council tax freeze grant had been a ‘tricky’ one for councils.
He said: ‘Collectively local authorities are facing a 33% cut in funding from government at the same time as the cost of providing services like adult social care is climbing through the roof. The council tax grant from government is very small when set against those pressures and it lasts just two years ,with no certainty beyond that.
‘Ultimately, councils have to take a long-term view. Some have clearly decided that increasing council tax is one way of meeting current costs and alleviating pressure in the longer term. Councils are fully accountable to their electorates for these decisions.’
