Households across several regions of England are facing significant increases in their council tax bills, with seven local authorities granted special permission to raise rates beyond the standard 5% limit. This development forms part of a new three-year local funding settlement recently agreed by the Government, which aims to better align financial support with local needs.
Breaking the Standard Limit
Under normal circumstances, most councils are restricted to increasing their share of council tax by a maximum of 5%, unless they secure approval from residents through a local referendum. However, a small number of councils experiencing acute financial pressures have been granted special flexibility to exceed this threshold without requiring a public vote.
Specific Council Increases
The councils receiving this special permission face varying degrees of financial challenge, reflected in their different permitted increases:
- Shropshire, Worcestershire and North Somerset councils will be allowed to increase council tax by up to 9%
- Trafford, Warrington and Windsor and Maidenhead can raise their share by up to 7.5%
- Bournemouth, Christchurch and Poole Councils have been granted permission to raise council tax by up to 6.75%
Government's Funding Reforms
Local government minister Alison McGovern emphasised that these measures are necessary to support councils still dealing with financial pressures created under the previous funding system. "Our local government finance reforms get money to where it is needed, but we recognise that some councils remain in a challenging financial position as they continue to deal with the legacy of the previous system," she stated in a written parliamentary statement.
Ms McGovern stressed that the higher limits should not be viewed as targets, stating clearly: "These additional flexibilities are a limit, not a target. Decisions on council tax levels are for local authorities."
Addressing Deprivation
The Government's wider reforms aim to ensure funding more closely reflects levels of deprivation across different regions. "Only around a third of councils were given the funding to broadly match their assessed need before our reforms. By the end of the multi-year settlement, that will be nine in 10 councils," Ms McGovern explained.
She added that as a result of these changes, "the most deprived places will receive 45% more funding per head than the least deprived in 2028/29."
Financial Settlement Details
The comprehensive settlement includes several significant financial components:
- A £440 million increase to the recovery grant, bringing the total to £2.6 billion, aimed at councils most affected by cuts during the austerity years
- A further £272 million added to grants supporting homelessness, rough sleeping and domestic abuse services, raising that funding pot to £2.7 billion
Ms McGovern commented on the settlement's objectives: "We promised to reconnect funding to deprivation and this final settlement delivers on that promise. With more new funding, we're giving councils the certainty they need to plan ahead and transform services. Our purpose is to support families, tackle homelessness before it happens and finally give communities worst affected by historic cuts their fair share."
Concerns and Criticisms
Despite the Government's stated intentions, concerns have been raised about the settlement's distribution of resources. Steven Broadbent, finance spokesman for the County Councils Network and Conservative leader of Buckinghamshire Council, expressed disappointment with the outcome.
"Ministers have chosen to yet again unfairly target even more resources on a select cohort of urban and metropolitan councils," he stated. "Analysis by CCN shows that they collectively face a funding gap of £180 million next year, whereas county and rural unitary councils face a colossal £2.7 billion funding black hole."
Mr Broadbent argued that increasing the recovery grant rather than providing extra funding to all councils was "patently unfair" and would worsen pressures on rural areas. He warned: "The three-year period will be very challenging for all our member councils. County residents and their councils will be forced to make up a significant shortfall through council tax rises and cuts to local services."
District Council Perspectives
Jeremy Newmark, finance spokesman for the District Councils' Network and Labour leader of Hertsmere Borough Council, noted that the final settlement had created "winners and losers." He expressed particular concern for district and unitary councils in more remote and rural areas, stating: "It is clear that district and unitary councils, especially in more remote and rural areas, will struggle to preserve the full range of services that residents need and value."
While welcoming transitional funding protections, Mr Newmark warned that many districts still faced a real-terms reduction in core spending power. "That is why we will be asking Government to act beyond the finance settlement to help councils support themselves and continue delivering high-quality services," he said.
He further urged ministers to move quickly on a review of fees and charges, suggesting that councils should be allowed to recover the full cost of services they provide.
Looking Ahead
The higher council tax limits are expected to affect thousands of households across the specified regions. Local authorities now face the decision of whether to utilise the additional flexibility as they prepare their budgets for the coming financial year.
Council leaders have consistently warned that the next three years will remain financially difficult for many authorities, despite the new funding arrangements. The coming months will reveal how different councils balance their budgets while attempting to maintain essential services for their communities.
