Council tax in England to rise by 3.7 per cent

The Chartered Institute of Public Finance and Accountancy has revealed that the typical council tax bill in England is set to rise by £64.65, or 3.7 per cent, in 2020/21.

Council tax bills have risen consistently every year since 2012, though the latest findings from CIPFA’s annual Council Tax Survey indicate a second consecutive year with a lower increase than the year before. Variation in the percentage increase on 2019/20 between regions is not as stark as in previous years, with a difference of 0.8 percentage points between the highest increases (3.9 per cent) in outer London, the North West and the South West, and the lowest (3.1 per cent) in the East Midlands.

However, there remains a gap in monetary terms between the total bill of a band D property in inner London, at £1,304.55, and those of band D properties in the North East at £1,958.24, in part due to regional variation in the value of homes.

Councils in England are able to increase tax rates by up to the legal threshold of two per cent for the general local authority budget. Local authorities with responsibility for adult social care are able to raise council tax a further two per cent which must go to social care.

Rob Whiteman, CIPFA CEO, said: “Today’s findings illustrate that local authorities across the country are putting up their council tax to fight the ongoing legacy of austerity. The simple fact is that council tax, along with business rates and central government grant, is no longer enough to fund increased demand on vital public services, including social care. These funding mechanisms remain in an unsustainable position for the long term.

“We will be looking to next week’s Budget, and the comprehensive spending review that must follow, for bold decisions that re-align the ability of local authorities to raise revenue in line with demand for services in their area.”