Council tax set for biggest increase in 14 years, CIPFA survey finds

1 Mar 18

Just over 95% of councils across England will raise council tax next year and bills are set for the biggest increases in 14 year, according to CIPFA’s annual survey released today.

Of the 276 councils that responded, 263 will increase their council tax, taking advantage of the ability to raise it by up to a further 1%, allowed by the local government finance settlement for the next financial year.

Excluding the 3% precept for adult social care, 71% of English authorities would increase council by the maximum 2.99% allowable before reaching the local referendum threshold, CIPFA found.

Authorities with adult social care responsibilities can raise an additional 3% without the need for a referendum via the adult social care precept.

CIPFA calculated households across England were to see an average council tax increase of £81.05 (5.1%) – the steepest hike in 14 years.

It also identified the gap between rates across the country. The average band D bill in the North East is now £1,799, whereas in inner London it is £1,194.

Rob Whiteman, CIPFA chief executive, added: “This sharp rise in council tax across the country reflects the enormous financial pressures many local authorities are currently under.

“Local government has made by far the biggest efficiencies in the public sector since 2010, but now it feels like crunch time, with the consequences of earlier funding cuts really beginning to bite.”

He called Northamptonshire County Council’s need to issue a section 114 notice last month - meaning it had used its reserves and was unable to produce a balanced budget – a “test case for what the minimum services can be that a council is required to deliver”.

Northamptonshire has since revised its budget to find a further £9.9m of savings.

Whiteman said children’s and adult social care were the main focus of resources for many town and county halls, and they were coping with increased demands against a backdrop of government grants being phased out, often using reserves.

“It is clearly time for an honest conversation about what services councils should realistically be expected to deliver,” he said.

In addition, almost 90% of police and crime commissioners in England (31 out of 36 PCCs responded) have also gone for increases of between £11.97 and the maximum allowable increase of £12, CIPFA revealed.

“This comes at a time of increasing pressure on police funding and follows the report late last year on efficiency from Her Majesty’s Inspectorate of Constabulary and Fire and Rescue Services which, while highlighting the financial challenges for some forces, stated that further efficiencies could be made,” the institute stated.

Home secretary Amber Rudd announced in December last year the police would be able to increase their precepts up to £12 as part of the police settlement for 2018-19.

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