Council tax intentions in 2013

The government has once again offered funding to local authorities willing to freeze council tax, but it is not clear the take up will be as enthusiastic as it was last year (90% of councils) or the year before (100%).

The annual LGC Council Tax Survey took the temperature of finance directors in November, shortly after the chancellor announced the latest funding deal, and found only 55% were planning to freeze council tax, 22.4% were planning to increase council tax and 22.4% were unsure. (The same survey the year before showed 80% freezing, 4% increasing and 16% not knowing).

While ministers emphasise councils’ “moral duty” not to pile financial pressure on residents, councils are looking for alternative sources of income in the face of significant reductions in central government funding. While the freeze funding the government provides lasts a year or two, it does not last for ever and when it does come to an end it presents yet another budget reduction with which councils must deal.

I’m betting this time there will be more councils - a quarter, maybe even a third - increasing council tax and arguing a further year of freeze is incompatible with protecting front line services.

Those increasing council tax have to consider the other half of the government’s council tax policy, and that is the requirement for councils to hold a referendum if they wish to increase charges above a certain percentage set by the secretary of state, this year 2%.

Although it is highly unlikely that anyone will decide to run a costly and probably unwinnable referendum, LGC’s tally of intentions shows a number of councils increasing above 2% and this is because there are a couple of exceptions to the 2% rule.

First, the referendum rules set by the Department for Communities & Local Government mean councils with significant levy payments to bodies responsible for services such as waste and transport can have variable referendum trigger points. Manchester City Council and Rochdale MBC are two examples of this situation, as reported by LGC. (And the government has now announced it will close this “loophole” next year.)

Second, the government has made an exception of districts with the lowest tax levels. Examples include South Hams DC and East Lindsey DC, as reported by LGC.

As councils ponder all these issues and decide whether or not to accept the government’s funding to freeze council tax in 2013-14, LGC’s live council tax blog will be keeping track of authorities’ proposals and final decisions.

* The table is based on press reports and is not a complete record of proposals made by councils. An authority’s plans may have changed since inclusion in this table. Please email any queries or comments or leave your message below.

Councils intending to cut council tax

Councils intending to increase council tax

Councils intending to freeze council tax