Council Tax: Shire counties face biggest increase

Ministry of Housing, Communities and Local Government data has show that local authorities in England will put up the average band D council tax by 4.7% next financial year.

The average English band D council tax will increase by £78 (from £1,671 in 2018-19 to £1,750 in 2019-20).

In total, 10 of the 15 highest council tax areas are located within counties. In seven areas, residents face Band D bills of over £2,000 from next month. The most expensive, on average, is Rutland (£2,043), followed by Nottingham (£2,038) Dorset (£2,038), Lewes (£2,024) and Newark and Sherwood (£2,024).

Residents in shire counties will be paying £76 more than the national average (£1,750), £349 than the average in London (£1,477), and £87 more than metropolitan boroughs and the major cities (£1,739). They also will see the highest rise from next month of £82 extra on average.

The County Councils Network says that ‘historic underfunding’ of counties has left many shire areas little option but to raise bills to make up the shortfall. Counties will receive £148 per person for public services next year, - 66 per cent less than councils in inner London (£437 per head), and 52 per cent less than metropolitan boroughs and the major cities (319 per head).

In contrast, nine of the lowest council tax areas in the country are all located in London. On average, inner London boroughs such as Westminster receive £437 per person, and can offer the cheapest council tax rates in England of £755, which is half of that of the average county’s rate, despite Westminster’s having an average house price of £985,000.

With counties’ elderly population rising by almost half a million over the last four years (460,000), county leaders warn that council tax increases will not offset the funding pressures they face, especially as they are the lowest funded councils with social care responsibilities.

The government is currently reviewing the way councils are funded in the the Fair Funding Review. The County Councils Network is calling on the government to implement a new methodology next year that genuinely funds councils based on their present and future demand for services, particularly the social care services. County leaders are also calling on a fairer approach to council tax, to unsure rural residents are not paying disproportionally higher amounts.

Cllr Nick Rushton, County Councils Network finance spokesman, and leader of Leicestershire County Council, said:

“No-one wants to put up council tax, but many of us have very little option with county authorities facing the most severe financial pressures. Despite welcome announcements last year, the picture remains extremely challenging; council tax rises alone will not offset the funding pressures social care authorities face. This has left most of us unable to turn down desperately-needed resource, particularly when there is finite money for care services.

“For a long time, county residents have borne the brunt of the historic underfunding of county areas. It cannot be fair that a resident in a terraced home in Hinckley in Leicestershire is paying double that of a resident in a multi-million-pound house in Westminster.

“This is why the government’s fair funding review is crucial in not only providing a fairer and more equitable system, but to provide new resource for underfunded authorities to cope with the rise in demand for local services, alongside more money for councils in the Spending Review. We will work with government and other parts of local government to ensure these two golden opportunities are not missed.”

Richard Watts, chair of the Local Government Association’s resources board, said:

“Between 2010 and 2020, councils will have lost almost 60p out of every £1 the government had provided for services.

“Faced with a government funding settlement that assumes maximum council tax rises and such funding pressures, many councils feel they have little choice but to ask residents to pay more council tax again this year to help them try and protect their local services.”