Millions of households face major hikes in their council tax bills this April in another cost of living blow.
According to new analysis, more than four million households face council tax rises of up to five times the legal limit from April this year. Residents in one area could see their bills rise by 25%, this is the largest increase in England for 20 years, reports the Daily Mail. Seven other councils across the UK are planning for rises of between 9.99% and 15%.
Under government rules, local authorities are allowed to increase council tax by up to 4.99% without a referendum. This is a rise of 3% plus 1.99% if the council provides adult social care. However, councils can request higher hikes in “exceptional circumstances” – such as being close to declaring bankruptcy. The central government then considers this on a case-by-case basis.
Councils can also take advantage of a “loophole” through a Section 114 Notice, by using a report from the council’s finance officer that states the authority cannot operate within its existing budget. This notice is the equivalent to a declaration of bankruptcy from the authority. Around 4.4million residents across seven local authorities are set be impacted by council tax rises beyond the official limit, according to the Mail.
Lib Dem-run Windsor and Maidenhead council has a planned rise of 25% which is the highest among the seven councils looking to exceed the limit. The move would add an extra £451 on average to the average household’s annual bill.
The Taxpayers’ Alliance – which has been campaigning in Windsor and Maidenhead against their proposed hike – argued that taxpayers shouldn’t be “forced to bankroll town halls’ spending addiction.” Benjamin Elks, grassroots development manager at the group, said: “Local taxpayers are fed up with having to pick up the tab for reckless councils. As hard-working households across the country tighten their belts, local authorities are refusing to rein in their out of control spending, squandering cash on pointless pet projects.
“It’s high time town halls focused on delivering core services efficiently, not asking local residents to keep funding their dangerous addiction to spending.”
Tory-led Hampshire County Council and Labour-run Bradford Council are both planning 15% rises. In November, Hampshire Council said its budget gap – what it needs to spend to provide services in 2025-26 tax year – is forecast to be £182million. If the increase is approved, the 10% hike would raise an extra £84million. Bradford Council says its 2025-26 shortfall sits at £50million and its proposal has now been put forward for approval.
In a letter to county councillors, Hampshire’s chief executive Carolyn Williamson said that “despite being a well-run, high-performing council that manages its resources with the utmost care and precision, we can no longer make enough savings and still deliver our statutory responsibilities”.
She added that by 2026-27, a Section 114 notice “becomes a real possibility if there are no deep-seated changes to the way local government is funded”.
Birmingham City Council – which declared bankruptcy in 2023 – is looking to hike its council tax bills by another 9.99% for the second year running. If granted, residents will have seen a nearly 20% rise in the two years since its collapse, which equates to a £400 rise over the period for the average band D property.
A Ministry of Housing, Communities and Local Government spokesperson said reports there could be council tax rises above 5% were “speculation”. They said: “No decisions have been made on council tax increases and we will only consider agreeing to requests for rises above 5% in exceptional circumstances, in line with the previous government’s position. Councils are ultimately responsible for setting their own council tax, and we will put taxpayers at the forefront of any decision.”
In 2024-25. the government agreed to provide 19 councils with support to manage their financial pressures through the Exceptional Financial Support Framework (EFS). For 11 councils this included agreement to support for prior years. All of these councils were given “in-principle capitalisation support” in February 2024.
Below are the 19 councils awarded the extra support last year, and how much the published proposed council tax rises for this year:
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