Why does Council Tax rise?

Rises are driven by the scale of the financial pressures that authorities are under.

The Council’s Network reports there will be a collective funding gap of £1.1bn over the next 2 years even after the rises in council tax.

Financial strain on the authorities

Four councils have been forced to declare effective bankruptcy including Birmingham, Woking, Slough and Thurrock. Because of this, the Independent report that they have been given special dispensation by the government to raise their council taxes by up to 10%. Thurrock plan to put the cost up by 7.99%.

When a council has gone bankrupt that area may experience some cut backs including bin days becoming more irregular and street lights being dimmed.

Councils are struggling to balance their budgets due to high inflation and high demand for care services. The government had supplied £600m extra to local government for 2024/25. With £500m of this for social care which will make a substantial difference to the local services.

The rate of inflation is effecting various areas of living for households and businesses including phone contract prices rising to the price of rental properties.

As well as the high prices creating hardship on households, the authorities are also struggling to make ends meet causing them to increase the cost of council tax.

How much are council taxes going up?

Most councils plan to raise their council taxes by the maximum of 4.99%. Band D council tax is raising to an average of £2171 which is an increase of £106 from last year or 5.1%.