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Freeze ends as almost 50% councils plan maximum tax hikes

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Almost half of councils are set to raise council tax by the maximum amount allowed without triggering a referendum, according to the latest findings from LGC’s Council Tax Tracker.

Bosworth

Freeze ends as almost 50% councils plan maximum tax hikes

LGC’s Council Tax Tracker finds 73% of eligible authorities plan to use precept

In a clear signal that the big council tax freeze is thawing, our current data shows just one in 10 councils are planning to maintain bills for residents at the same level in 2016-17.

According to Department for Communities & Local Government figures, 57% of councils opted to freeze council tax in 2015-16.

Out of the 89 council tax proposals obtained by LGC so far, 42 councils (or 47%) are planning to raise council tax bills by the maximum amount they can.

Ten out of the 19 districts for which LGC has obtained details are minded to raise it by at least 2%, including five which are planning to make use of the new power for districts with low council tax levels to impose increases above 2% (see box).

The largest of these increases is being proposed by Hinckley and Bosworth BC.

In addition 32 of the 70 councils with social care responsibilities which have revealed their proposals plan to make the maximum rise of 3.99%, comprising the 2% social care precept and a 2% regular council tax increase. A further 12 are planning to make increases just below the maximum ranging from 3.9% to 3.98%.

Without the social care precept or the new freedom for districts, proposals to increase council tax above 2% would require a referendum.

Big figures

Freeze ends as almost 50% councils plan maximum tax hikes

LGC’s Council Tax Tracker finds 73% of eligible authorities plan to use precept

Of the upper tier authorities eligible to apply the precept, 51 (or 73%) plan to make use of it even if some have yet to decide whether to make a council tax increase. A further 16 councils which have published plans for the main element of council tax have yet to outline their position on the precept.

The findings suggest uptake of the social care precept is likely to be widespread. However, three upper tier authorities are set to ignore it. They are Labour-run Hammersmith & Fulham LBC, Cambridgeshire CC and Stoke-on-Trent City Council which are both under no overall control.

Meanwhile, just nine out of the 89 proposals made public so far included plans to freeze council tax. They are Hampshire and Suffolk CCs (both Con), Northampton (Con) and Redcar & Cleaveland (Lab) BCs, East Cambridgeshire and Wyre Forest DCs, and St Albans City & DC (all Con), along with Hammersmith & Fulham and Stoke-on-Trent.

After five years of freeze grants, the communities secretary Greg Clark decided to scrap the offer in the latest finance settlement and said he would “assume” local authorities would increase council tax “in line with inflation rather than the referendum threshold of 2%” every year over the parliament.

Additional reporting by Ben Hatton

 View the LGC Council Tax Tracker data on a map 

Districts make use of new freedoms

Five district councils – all Conservative – are planning to take advantage of new council tax freedoms to increase bills by more than the 2% referendum limit next year.

The provisional local government finance settlement handed districts the freedom to increase council tax by whichever is the greatest of £5 or 2% on a band D property.

Hinckley and Bosworth BC is proposing a 4.5% hike, the highest percentage increase in council tax so far proposed for 2016-17, according to the Council Tax Tracker data.

East Lindsey DC is planning a 4.06% rise, equivalent to £4.95 on a Band D property while Stratford-on-Avon plans a 3.9% hike.

South Kesteven DC, also in Lincolnshire, plans to increase council tax by £5, equivalent to a 3.58% rise, as does Fareham BC in Hampshire where it is equivalent to 3.57%.

There are 51 district councils where a 2% increase would be less than £5. Of the six of these for which LGC has obtained information only East Cambridgeshire DC is not planning to make use of the facility, proposing instead to freeze council tax.

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