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The biggest council tax rises revealed so far

Councils across the country are pushing up council tax bills in a bid to deal with mounting debt

Council tax bills across the UK are set to soar by more than nine per cent in places as local authorities battle to try and balance their books.

The UK’s councils are struggling under a mountain of debt with 20 local authorities owing more than £30bn, the latest figures show.

Councils have found themselves under severe financial pressure after a decade of central government funding cuts under the Conservatives, followed by a spike in inflation and an increased demand for services in recent years.

Now Labour has given permission for local authorities to increase council tax by 4.99 per cent to help cover the financial black hole.

And six councils, Windsor and Maidenhead, Birmingham, Bradford, Newham, Somerset and Trafford, have been granted special authorisation to push up council tax bills by almost 10 per cent this April.

But others are still hoping to go above the 4.99 per cent cap.

Angela Rayner, Deputy Prime Minister and Secretary of State for Housing, Communities and Local Government gave the green light for the increases.

She said in a parliamentary statement: “Tough decisions are needed across local government to fix the broken system we inherited.

“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.”

She added that the government had “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”, she stated.

One in four councils in England believe they will need an emergency bailout within the next two financial years to stave off effective bankruptcy, according to a survey carried out by the Local Government Association (LGA) in 2024.

There have already been several high-profile examples of councils having to issue a Section 114 notice meaning a local authority cannot incur any new spending, leading to fierce political debate over allegations of financial mismanagement.

Windsor and Maidenhead Council

The Royal Borough of Windsor and Maidenhead Council applied for permission to increase its council tax by 25 per cent, prompting outrage among locals, otherwise it said it faced bankruptcy.

The request was denied by the Government but it has been permitted to raise council tax bills by 8.99 per cent.

A spokesperson for the Lib Dem council in Berkshire said: “The government has now responded to our request to increase council tax, to help set our budget for next year, by granting us permission to raise council tax by 8.99 per cent from April 2025 – an increase of 4 per cent above the 4.99 per cent cap.

“Recognising that only by increasing council tax and reducing the reliance on borrowing will the council become financially sustainable – our ask, to raise council tax by 20 per cent above the current cap of 4.99 per cent, was on the scale of increase necessary to set our budget following years of cuts to council tax from 2010.   

“Although 8.99 per cent is significantly below what we requested, we have been clear to government that we’ll need to increase council tax over the next few years unless there is a significant increase in government funding, it is one of only six increases in the country to be agreed.

“This demonstrates a recognition that our low levels of council tax, and that they are so out of kilter with other areas, is a significant issue for the council and our financial sustainability. “

Birmingham City Council

Labour-run Birmingham city council, the largest authority in the country, issued a Section 114 notice in September 2023 and government commissioners remain concerned it will not be able to balance its budget going forward.

Birmingham had more than £3.3bn of borrowing on its books as of 30 September 2024, according to the Ministry of Housing, Local Government and Communities.

Most of this, around £2.8bn is owed to the Public Works Loan Board, the Government’s lending facility which can be used for capital projects.

Birmingham council, which serves a population of 1.16million, wanted to increase its council tax by 9.99 per cent as part of its drive to get its finances back on track.

But it was granted a 7.49 per cent increase by the Government.

Bradford Council

The City of Bradford Metropolitan District Council has been granted permission for a 9.99 per cent increase for 2025/26.

If approved, Bradford’s council tax will still remain below average compared to the rest of West Yorkshire 

Cllr Susan Hinchcliffe, leader of the council, said:  “This decision to request a one-off increase in council tax beyond the usual 4.99 per cent was not taken lightly.

“None of us want to see an increase in council tax when other bills are also rising but we have a responsibility to make sure the council’s finances balance.  

“If approved in March, thinking of our least well-off residents, we’d put in place arrangements to further support low-income households.

“We are trying wherever possible to find new ways of working and new funding sources so that we can save money for council taxpayers without cutting vital services.  

“But by increasing council tax now, in many cases by £2 or £3 a week, we can avoid significant borrowing costs of £111 million for Bradford council taxpayers over the next 20 years and protect services in the longer term.”   

Newham Council

Newham Council has been given permission to up its council tax bills by 8.99 per cent.

The London borough is waiting to hear about its application for Exceptional Financial Support and will vote on the council tax increase at the end of this month.

Mayor Rokhsana Fiaz said: “We know that this is a difficult time for many of our residents and we don’t take the decision to raise Council Tax lightly.

“We will continue to support those most in need through our proposed 80 per cent Council Tax Reduction Scheme.

“We are also proposing to keep intact the 90 per cent Council Tax Reduction Scheme for eligible pensioners.

“I welcome the Government recognising the scale of the challenge we face in Newham as a result of 14-years of financial mismanagement by the previous conservative governments.

“If it wasn’t for the severe cost pressures of temporary accommodation and growing demand in social care, we would have set a balanced budget this year and next.”

The council said it has the highest number of residents in temporary accommodation in London, currently over 6,500, which has added a £100 million pressure to the Council’s finances over the next three years.

Somerset Council

Somerset Council has been allowed to raise Council Tax by up to 7.49 per cent, 2.5 per cent above the national cap.

The Council will now meet to decide whether to agree to the increase over the next month.

It said the increase would not raise enough money “to fill the gap” and so the authority would “again be reliant on a Capitalisation Direction”.

This is a form of one-off assistance which allows councils to sell assets or borrow money and use the proceeds to fund the budget gap and the day-to-day running costs.

Cllr Bill Revans, leader of the council, said the “announcement gives us clarity and we will need to consider the implications before we finalise our budget proposals for debate and decision at Full Council later this month.”

Trafford Council

Council leaders in Trafford had asked the government for financial support to address a “structural deficit in its finances”.

This year it is facing one of the toughest budgets yet with a £12m gap to bridge for 2025/26.

The Greater Manchester Council requested increasing council tax by 2.5 per cent above the cap and this has been permitted meaning residents will see their bills increase by about 7.49 per cent.

Leader of the council, Councillor Tom Ross said: “We have been facing significant ongoing financial challenges for several years.

“Historic funding deficits and increasing cost pressures and a rising need for services especially among children’s and adult social care, compounded by the many years of council tax freezes, mean it is becoming harder to deliver what our residents and businesses need while balancing our books.

“We are not alone in this, as a similar story is being repeated in other local authorities across the country.

“We understand the financial pressures that many of our residents are facing and we have not made the decision to seek to increase council tax lightly.

“However, we have no option if we are to get the council on a firmer financial footing, ensure we have a plan to rebuild our finances and to address the structural financial deficit.”

Hampshire County Council

Hampshire County Council want to push up its council tax bill by 15 per cent, 10 per cent above the cap.

“Hampshire County Council is well run.

“It has the second lowest council tax nationally.

Cllr Nick Adams-King, leader of the council, said: “We seek this increase only due to the rising costs of social care, special educational needs and those increased costs and lack of funding from the Government.

“We have used our reserves to balance the budget so far, but this is not sustainable if we are to avoid a Section 114 notice by 2026/27.”

But it was not one of the six council given special permission to exceed the 4.99 per cent increase.

The council is now considering its next steps at a cabinet meeting on Tuesday, these include a possible local referendum on whether to go above the 4.99 per cent cap.

Leeds City Council

Leeds council, also led by Labour, has the second-largest debt at £2.5bn.

The authority, which serves a population of more than 800,000 people, has proposed a 4.98 per cent council council tax hike and warned that “tough decisions” are needed to balance its budget.

Other councils which have more than £1bn in debt include: Woking, Edinburgh, Warrington, Glasgow, Barking and Dagenham, Aberdeen, Manchester, Enfield, Croydon, Cornwall, Fife, Lancashire, Highland, Barnet, Spelthorne and Southwark.

In December, Labour’s financial settlement for local government made £69bn available for councils, a real-terms increase of 3.5 per cent from 2024-25. This included a one-off £600m Recovery Grant for those most in need.

Minister of State for Local Government and English Devolution Jim McMahon said today: “We have been clear we will fix the foundations of local government.

“That means an end to short-term solutions and instead rebuilding the sector to put councils on a more stable and secure footing.   

“Local leaders play a crucial role in delivering the day-to-day services communities across the country rely on, which is why we want to work with them towards a fairer funding model that tackles regional inequality and prioritises outcomes for local people.”

Cllr Louise Gittins, Local Government Association (LGA) chair, said extra money for councils next year, including compensation for employer national insurance contributions increases, would help meet some of the cost and demand pressures they face but it still “falls short of what is desperately needed to cover them all”.

She added: “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.

“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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