Millions of families will be hit with a council tax hike of at least 3% in April as town halls scramble to plug gaps left by government.
Local Government Secretary Michael Gove today announced £1bn of extra cash for social care, and a one-off £822m grant for councils’ stricken general funds.
He boasted councils in England will get “£3.5bn more funding” than they did in 2021/22.
But only £700m of the £1bn in care cash is from the government – with the rest having to be levied through council tax bills.
Most councils responsible for social care will be allowed to raise bills by at least 3% – 1% for care and 2% for general funds.
A 3% rise would add £57 to the average Band D council tax bill, which is currently £1,898 a year – up from £1,439 in 2010/11.
Meanwhile, as many as a third of England’s councils will be allowed to raise tax by even more than 3%.
AFP via Getty Images)
Town halls that did not use up all of a 3% allowance last time will be able to carry it over to April – meaning some bills could technically rise by 4% or even 5%.
While the maximum allowed rise would technically be 6%, it is thought few if any councils are in this situation.
Council Tax bills will be decided in February and March next year.
Local Government Association chairman James Jamieson said the cash will help councils keep services running but “it will not go far enough”.
He added: “For that to happen every council will have to raise council tax by the maximum next year.
“This leaves them facing the tough choice about whether to increase council tax bills to bring in desperately-needed funding at a time when they are acutely aware of the significant burden that could place on some households.”
Last week two-thirds of local authorities that responded to a BBC survey indicated they would raise bills again in April.
A 3% hike is lower than many recent rises but comes after years of austerity cuts being passed onto individual homes’ bills.
Average Band D bills have soared by between 3.9% and 5.1% every year for the last five.
Carl Les of the County Councils Network warned they “still face a funding gap of at least £700m next year.”
He warned a “large proportion” of the cash Mr Gove announced will be used to pay the higher minimum wage and National Insurance.
Sharon Taylor of the District Councils Network added: “Altogether the settlement won’t be enough to meet the full weight of demands we’ll face over the next year.
“There are still funding gaps for Covid costs, leisure services and homelessness. And it doesn’t provide the funding or flexibility we need to invest in jobs, regeneration and net zero.”
The provisional finance settlement for the coming year, totalling £53.9 billion, includes £162 million would be allocated to prepare councils for social care reform.
Mr Gove said: “Today’s funding package represents a real-terms increase from last year’s settlement and will make sure councils can improve vital frontline services, support vulnerable people and protect residents from excessive council tax rises as we build back better from the pandemic.”
The provisional settlement is out for consultation for four weeks, closing on January 13.