More than four million households will face council tax hikes of up to five times the legal limit from April, according to new analysis.
In one area, household bills are set to increase by 25 per cent, which would be the largest increase in England for two decades, according to a report by the Daily Mail. Another seven councils have proposed rises of between 10 and 15 per cent from April.
Under current rules, local authorities are not allowed to increase their tax bills by more than 4.99 per cent without the approval of the government. They can request to raise more by threatening to declare bankruptcy if they aren’t able to significantly increase residents’ tax bills.
Councils can also take advantage of a loophole via a Section 114 notice, a report from the council’s finance officer that states the authority cannot operate within its existing budget.
Many councils are struggling financially under the growing costs of public services. One in four recently said in a Local Government Association survey that they were “likely” to need emergency support to avoid going bankrupt in the near future.
The map below shows the local authority areas where council tax is expected to rise.
Residents of Windsor and Maidenhead, west of London, are facing an increase of up to 25 per cent in their tax bills, the highest of any council area as local authorities launch individual bids to raise their incomes to stave off financial trouble. This is a £451 rise for the area’s 154,000 residents.
In a statement issued in December, the Windsor and Maidenhead said it was requesting the government allow it to raise council tax 20 per cent above the current allowable limit of 4.99 per cent, explaining the council faced bankruptcy if it didn’t do so.
“The measures are proposed in the context of the challenges of high inflation and interest rates, alongside increased demands for services, being felt by councils across the country,” it said.
“If the council is unable to secure the level of support required from government, the issuing of a statutory Section 114 notice – which means the council is effectively bankrupt - is almost inevitable.”
Advocacy group the Taxpayers’ Alliance said they were fighting Windsor and Maidenhead’s proposal. “They don’t seem to be able to grapple with the idea that their residents are not in a position to take the fall for the economic mismanagement that they have brought upon themselves,” they said this week.
Conservative-led Hampshire county council and Labour-run Bradford council are planning rises of 15 per cent. This will place £170 on the average bill.
Birmingham City Council, which declared effective bankruptcy in 2023, is looking into raising council tax by 9.99 per cent for the second consecutive year. If approved, Band D council tax payers in Europe’s largest local authority will see their bills rise by a combined £400 over the two-year period, the Mail reported.
Cheshire East Council said it has requested to increase its tax bill by five per cent above the allowable threshold mainly due to £27 million budget shortfall in maintaining local services.
The council’s Labour leader recently told BBC Radio Stoke: “The basic measure is we cannot balance our budget for next year without borrowing a significant amount, which will have to be paid back, or by increasing the council tax by up to 10 per cent,” he said.
Here is the full list of where council tax is expected to rise:
A spokesman for the Ministry of Housing, Communities and Local Government said: “No decisions have been made on council tax increases, and we will only consider agreeing to requests for rises above five per cent in exceptional circumstances in line with the previous government’s position.
“Councils are ultimately responsible for setting their own council tax, and we will put taxpayers at the forefront of any decision.”
