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First 5% council tax increase proposed

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The first councils to propose a 5% increase in council tax next year have emerged.

Manchester City Council and Liverpool City Council have said they will be seeking to take up the government’s offer of raising the social care precept by 3% in 2017-18 in addition to a 1.99% increase in regular council tax.

This comes after communities secretary Sajid Javid confirmed in the local government finance settlement last month that top tier councils would be allowed to raise the social care precept by an additional 1% in each of the next two years if they wished.

Manchester City Council said raising the precept by 3% would raise £8.8m for adult social care services next year. It has announced it plans to raise the precept by 3% again in 2018-19 before reverting to a 1.99% increase in council tax in 2019-20.

“If we did not proceed with council tax rises, we would have to find £17.3m more savings,” the council said in a statement.

It added Manchester City Council was seeking to put £30m extra funding into adult social care over the next three years – it currently spends £157m on these services – “to try to keep pace with growing demands” but said the funds raised “will only address a small proportion of the pressures”.

Meanwhile, Liverpool City Council’s mayor Joe Anderson (Lab) has ruled out holding a referendum on a 10% council tax increase, which he had mooted in November.

In his latest blog post Mr Anderson said he had received a “clear” response from residents to the council’s budget simulator which showed 57% did not support an additional 6% increase in council tax, ring-fenced for social care, on top of the original 3.99% referendum limit.

“I said I would listen to the feedback we got. I will therefore not be proposing to hold a referendum on any additional increase beyond the 4.99% limit set by Government,” said Mr Anderson.

LGC previously reported how Conservative leaders of county councils, which have elections in May, expressed doubts about whether to raise council tax by the 4.99% limit in 2017-18.

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