North vs South: Council tax to increase by 5.1%
New government data shows households in the North East are set to pay £420 more for an average band D property than those in Greater London.
The Department for Levelling Up, Housing and Communities (DLUHC) have released new figures that illustrate that the average band D council tax set by councils in England for 2024/25 will be £2,171, which is an increase of £106 (5.1%) compared to the figure from the previous financial year.
In addition, the research also unveiled that the council tax requirement will be £41.2bn, of which £609m will be raised through the adult social care precept flexibility, and £783m will be gathered from parish precepts.
Currently in England, the cap on council tax is set at 4.99%, though this varies depending on the powers of the local authority.
Against this backdrop, data that was compiled by the County Councils Network (CNN) and published last month found that out of 136 county and unitary local authorities in England who have so far published their budget proposals, 128 plan on raising council tax by the maximum permitted – 4.99%.
However, the bad news doesn’t end there. The Chartered Institute of Public Finance and Accountancy (CIPFA) have completed some research of their own, which shows that households based in the North East will fork out £420m more for an average band D property in 2024/25 than those living in Greater London.
CIPFA said this is a ‘worrisome picture’, where poorer areas of the country pay more council tax than wealthier regions. Its survey of 215 local authorities found that the average band D council tax in Greater London will be £1,894 while in the Northeast it will be £2,315.
Commenting on the news, Rob Whiteman, CEO of CIPFA, said: ‘In the absence of long-term funding, the rise in council tax is an example of the government’s presiding over a failing funding system.
‘With central government prioritising cuts in taxes and consequent spending cuts, this places more burden on councils to increase the level of council tax by the maximum allowed at a time and many residents will see a reduction in the level of service provided.’
Within its survey, CIPA reported, with the exception of Greater London, that band D council tax for all areas of England now exceeds £2,000.
Echoing a similar tone to Whiteman, Iain Murray, director of public financial management at CIPFA, has also expressed his frustration: ‘It is concerning that in some places, the funds raised from a rise in council tax will still not ensure proper maintenance of public services. The continuous council tax gap between London and the rest of the country further reflects the profound regional inequalities that exist.
‘With the public sector model crying out for systematic reform, CIPFA’s council tax survey leaves us asking: What is the role of local government? What do we want our public services to provide for us? And how do we fund this?’
Image: The New York Public Library
Increased council tax is forcing the sale of holiday rentals, MS says