Council tax sees largest hike in 14 years across England

But cuts in services set to continue, warns head of Local Government Association

Local authorities expect to gain almost £2bn of extra cash from the bigger bills (Peter Byrne/PA Archive/PA Images)

Households across England will be hit with the largest council tax hike in 14 years in the new financial year when the average home will pay £81 more.

Council tax bills in shire areas are the highest at £1,749, up by £86, according to the Ministry of Housing, Communities & Local Government (MHCLG).

People living in Band D properties in England will see an average 5.1 per cent increase in their tax bill, rising to £1,671

The same category of property in London will pay £1,405, an increase of £55 on 2017/18, according to MHLG figures.

Cash-strapped local authorities are taking advantage of new freedoms allowing them to increase bills by as much as 5.99 per cent without consulting voters.

Councils leaders said caps on bills since the Conservatives took power had left them with “little choice” but to ask residents to pay more.

Local authorities are expecting to gain nearly £2bn of extra cash from the bigger bills, but Lord Porter, Local Government Association (LGA) chairman, warned town halls will still have to cut services.

The LGA said councils were still heading for a £5bn funding gap by 2020.

“Since 2010, council tax bills have risen by less than inflation and other key household bills,” Lord Peter said.

“But faced with severe funding pressures, many councils feel they are being left with little choice but to ask residents to pay more to help them try and protect their local services.

“The extra income this year will help offset some of the financial pressures they face, but the reality is that many councils are now beyond the point where council tax income can be expected to plug the growing funding gaps they face. This means councils will have to continue to cut back services or stop some altogether to plug funding gaps.

“The need for adequate funding for local government is urgent. We have repeatedly warned of the serious consequences of funding pressures facing services caring for the elderly and disabled, protecting children and tackling homelessness for the people that rely on them and the financial sustainability of other services councils provide.”

The rise is the highest since 2004/5, but Communities Secretary Sajid Javid insisted bills were lower in real terms under the Conservatives.

Andrew Gwynne MP, Labour’s shadow communities and local government secretary, said: “This shows that under the Tories, you pay more for less.

“Over the last eight years, council budgets have been reduced by 50 per cent and services cut, with local people forced to pick up the slack as council tax bills soar.

“After almost eight years of Tory austerity, it’s time for real change. We need to elect as many Labour councillors as possible on 3 May to stand up to the Conservatives’ cuts.”

Mr Javid announced in December a 1 per cent increase to 2.99 per cent in the maximum council tax hike permitted without triggering a local referendum.

England’s 152 social care authorities – the county and unitary councils and metropolitan boroughs which take the lion’s share of the tax – are allowed a 3 per cent precept on top to help fund adult care.

In the new financial year, 148 out of 152 adult social care authorities will add some or all of the 3 per cent precept they can charge to cover adult social care.

The extra charge accounts for £30 of the average band D bill, the department said.

Mr Javid said: “Council tax in England is 7.6 per cent lower in real terms than it was when we came to government, and we have introduced a legal right for local taxpayers to veto excessive increases.

“Under the last Labour government council tax doubled and in Labour-run Wales it has trebled.”

Press Association contributed to this report