Nine in ten councils are set to impose the highest tax hikes they can – but will also slash services with one in 12 facing the risk of bankruptcy
- Most councils will raise tax by the largest amount allowed without a referendum
- Average band D households could now face a hike of £98 from April to £2,064
Most English councils plan to use maximum tax hikes alongside cuts in ‘desperate measures’ to avoid bankruptcy.
A report found that nine in ten local authorities will increase council tax, or hike charges on waste or parking.
The majority of councils surveyed will cut spending on services, while 1 in 12 said money troubles risked them going bankrupt.
The report, by the Local Government Information Unit, reveals how families struggling with the cost of living will bear the brunt.
Most councils said they will increase council tax by the largest permissible amount without a referendum – between 2.5 and 3 per cent – and almost every council providing social care will use powers to demand a further 2 per cent increase from April.
A report found that nine in ten local authorities will increase council tax, or hike charges on waste or parking
Taken together, households living in an average Band D home could face a hike of £98 from April to £2,064.
Jonathan Carr-West, Chief Executive of LGIU, said councils’ confidence in their finances was at ‘an all-time low’ and that councils are being ‘let down by a funding system that is not fit for purpose’.
Council budgets were one of the major losers in the austerity years as the NHS and schools’ budgets were protected, but 2023 is proving ‘an unusually difficult year’ due to rampant inflation and cost of living pressures on residents.
The fall in funding from central Government has led many to increase council tax at their highest possible rate each year, adding hundreds of pounds per year to household bills.
Jonathan Carr-West, Chief Executive of LGIU, said councils’ confidence in their finances was at ‘an all-time low’
Despite this a fifth of local authorities said a lack of cash would lead to cuts in frontline services that would be evident to the public.
In the last three years, Croydon, Slough, and Thurrock councils have all declared effective bankruptcy, and a fourth – Woking – has warned it could be ‘worse than bankrupt’ due to borrowing.
Councils have been criticised for using public money to invest in commercial deals, many of which have gone sour, but they claim they have no choice if they are to keep services running.
Just over half of councils, 52 per cent, said they would be increasing commercial activity this year, primarily through local developments and asset sales.
Source: Read Full Article