Above 5% council tax increases approved for six areas - see the full map and what Angela Rayner said
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The government has given approval for six councils in England to increase council tax by above 4.99 per cent (the maximum permitted without holding a referendum).
Councils can raise council tax by more than 4.99 per cent without a referendum if they have government approval.
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Hide AdAngela Rayner’s statement on council tax in full
Angela Rayner, Secretary of State for Housing, Communities and Local Government, said: “The government is committed to keeping taxes on working people as low as possible; and at the same time, is under no illusions about the fragile state of the sector and the pressures councils are facing to deliver for residents. For too long, councils have seen budgets cut and been forced to turn to excessive tax rises to continue to deliver vital frontline services.
“This Settlement maintains the previous government’s policy on council tax increases. As set out in the March 2024 Office for Budget Responsibility forecast, this means a 5% council tax referendum principle, made up of a 3% core principle, and a 2% principle for the adult social care precept. These principles do not force councils to set taxes at the threshold level, and exist to protect taxpayers from excessive increases. When taking decisions on council tax levels, the government expects all Councillors, Mayors, Police and Crime Commissioners and local councils to consider the impact on households.
“For the vast majority of councils, alongside the government’s injection of additional grant funding set out above, these principles will be sufficient to support councils in setting their budgets. But we know that the fragility in the system has left some councils in difficult positions. That is why the government said it would consider requests from councils for additional flexibility in the council tax referendum principles, where they are seeking exceptional financial support and see increases as critical to their financial sustainability.
“The ability to request additional increases already existed, but this government has been clear that we intend to take a stricter approach that puts taxpayers at its heart. This means avoiding excessively high increases, and only agreeing increases where councils have comparatively low existing levels of tax and plans in place to protect the vulnerable. This has limited the number and scale of additional increases. In particular it has meant government has not agreed where councils have asked to increase council tax by a very high amount in a single year or by high amounts in successive years. This is a contrast to the approach recently taken in councils such as Croydon, Thurrock and Slough.
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Hide Ad“As a result of the 14 years of decline and instability overseen by the previous government, we know there are large numbers of councils in significant financial difficulty. This financial legacy of the previous government has resulted in a record number of councils engaging with the government about support to help them set their budgets, and a record number of these councils asking for additional council tax increases.
“Having carefully considered requests from councils, the government has agreed small increases for six councils. For the 2025 to 2026 Settlement, bespoke additional council tax referendum principles will apply for Windsor and Maidenhead Borough Council (+4%), Birmingham City Council (+2.5%), Bradford Council (+5%), Newham Council (+4%), Somerset Council (+2.5%) and Trafford Council (+2.5%).
“These are difficult decisions that government has not taken lightly. We recognise the importance of limited increases in helping to prevent these councils falling further into financial distress – but we have been clear this must be balanced with the interests of taxpayers.
“We have agreed to a limited number of requests and in all cases have not agreed to the full amount requested. Where we have agreed, it is only for councils with amongst the lowest levels of council tax, and where we expect, even after these increases, residents will still be paying less than the average compared with similar councils. At a national level, even with these increases, the overall increase in council tax is not expected to exceed last year’s.
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Hide Ad“Following confirmation of these referendum principles, it will be for individual councils to take final decisions on setting council tax in their areas, having reached agreement locally that the increases are necessary to the council's financial recovery. I have been clear to all councils that they should take whatever steps locally they consider will help to protect the most vulnerable residents from the impact of any additional increase.
“The position we have confirmed today is in respect of requests for council tax flexibility. Decisions on councils’ overall request for exceptional financial support will be taken and communicated ahead of local budget setting. As with previous years the government will publish details of any support once agreed.”
Councillor Louise Gittins, Chair of the Local Government Association, said:
“Extra money for councils next year, including compensation for employer national insurance contributions increases, will help meet some of the cost and demand pressures they face but still falls short of what is desperately needed to cover them all.
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Hide Ad“This financial year therefore remains extremely challenging for councils of all types who now face having to increase council tax bills to bring in desperately needed funding next year yet could still be forced to make further cuts to services. Wherever possible they will be working alongside their local partners to innovate and try and protect the services that people rely upon as much as they can.
“Councils also recognise that having to increase council tax places yet more financial burden on households. We remain clear to Government that it is not the answer to meeting the long-term pressures facing high demand national services.
“The forthcoming Spending Review will be critical to the future of our local services and must include significant and sustained increases in overall funding for councils.
“However, this alone will not address the multiple issues with the way local services are funded. Councils stand ready to work with the Government on creating an improved and a more sustainable future funding system that works for the whole of local government.”
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Hide AdWhich councils have been granted an above 4.99 per cent council tax rise?
Bradford Council asked the government for a council tax increase of between 9.99 per cent and 14.99 per cent. The government has now approved a 9.99 per cent council tax increase.
Birmingham City Council requested permission from the government to raise council tax by 9.9 per cent. The government granted the council a 7.5 per cent increase.
The Royal Borough of Windsor and Maidenhead council asked for permission to raise council tax by 24.99 per cent, however the government approved a 9.99 per cent increase.
Newham Council requested permission to increase council tax by 9.99 per cent, but were granted a 8.99 per cent raise.
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Hide AdA council tax increase of 7.5 per cent has been approved for both Somerset Council and Trafford Council.
Which councils had their request for an above 4.99 per cent council tax rise rejected?
Cheshire East Council asked the government for permission to increase council tax by 9.9 per cent, but their request was rejected.
Hampshire Council requested permission to raise council tax by 14.99 per cent, but the government rejected their request.
Which councils will see a maximum 4.99 per cent council tax increase?
In a survey from the County Councils Network, 93 per cent of county and unitary councils said they would have to raise council tax by 4.99 per cent.
Lancashire County Council is set to increase council tax by just over 5 per cent to pay for policing.
West Northamptonshire Council has proposed a 4.99 per cent council tax increase.
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