Almost every household in the country will be hit by an inflation-busting council tax rise of up to 6% from April.
Town halls and their taxpayers are now perilously close to the edge after years of swingeing cuts from Tory government, the head of councils nationally has warned.
On top of the huge rises, more than 90% of councils are considering hiking fees for garden waste collection, meals on wheels, burials and planning applications.
And police and fire authorities are being forced to impose the maximum possible ‘precept’, which comes on top of any normal rise, just to keep pace with inflation.
Local Government Secretary Sajid Javid gave councils in England the green light last December to increase bills by as much as 2.99% instead of 1.99%.
Authorities that provide social care can also impose a precept of up to 3% – a total rise of 5.99%. This is almost double the rate of inflation.
Today a major report reveals council tax will be hiked by nearly all English local authorities as a vast majority fear for their financial stability.
More than two thirds of councils plan to raise council tax by at least 2.5%, the survey reveals.
A 6% rise – contemplated by a fifth of councils – would take the annual cost for a typical property (the average Band D home) up £95 to £1,686.
Nearly all councils (95%) plan to increase council tax while 93% will hike charges to make ends meet, the 2018 State of Local Government Finance research conducted by the LGiU think tank and The Municipal Journal found.
The planned increases come against a backdrop in which 80% of councils fear for their financial stability.
The greatest immediate pressure on budgets came in children’s services (nearly 32% of councils), followed by adult social care (nearly 28%), and housing and homelessness (19%).
Adult social care was the greatest long-term pressure (nearly 38%), the survey said.
Critics say the Government has made an outrageous attempt to pass the buck to cash-starved councils.
Some fear that even rises of nearly 6% will not be enough to plug financial black holes created by 40% cuts in Whitehall funding since 2010.
*These are the average rates in 2017/18 for each band in the UK, and what level they will hit in 2018/19 if they rose by the maximum 6%. Actual bills vary greatly from council to council.
BAND – 2017/18 rate – Possible 2018/19 rate
Band A – £1,061 – £1,137
Band B – £1,237 – £1,323
Band C – £1,414 – £1,511
Band D – £1,591 – £1,698
Band E – £1,945 – £2,074
Band F – £2,298 – £2,448
Band G – £2,652 – £2,823
Band H – £3,812 – £3,386
Jonathan Carr-West, chief executive of LGiU, said Councils are on the edge.
They are for the most part holding services together (though a significant minority are not).
But they can only do this this by raising council tax, increasing charging and draining their reserves.
The system is unsustainable and needs far more fundamental reform than is presently on offer. It’s simply not acceptable that we don’t know how local government will work post 2020.
Councils are calling for assurances around funding for the next three years and for a fundamental redesign of the finance system. At present government is offering neither. That has to change.
Responding, Local Government Association chairman Lord Porter said Some councils continue to be pushed perilously close to the financial edge.
Many will have to make tough decisions about which services have to be scaled back or stopped altogether to plug funding gaps.
Extra council tax raising powers will helpfully give some councils the option to raise some extra income but will not bring in enough to completely ease the financial pressure they face.
This means many councils face having to ask residents to pay more council tax while offering fewer services as a result.
The LGA has warned about the urgent need to address the £2 billion funding gap facing children’s services.
A child is being referred to council children’s services every 49 seconds on a daily basis and councils started more than 500 child protection investigations every day last year – up from 200 a decade ago.
This unprecedented surge in demand shows no sign of abating.
A total of 113 individual councils responded to the survey, representing a third of all English local authorities.
152 councils in England – including all London boroughs, county councils, unitary and metropolitan authorities, can hike council tax by a further ‘precept’ of three per cent if it is earmarked for social care.
There are a total of 353 local authorities in England – the rest are made up of 201 District Councils.
Last night it was claimed Britain’s richest county, Surrey, is facing a £100 million cash crisis – one of the worst financial shortfalls in the country.
Council documents are said to warn of a £105 million funding gap – the difference between the funding it expects to receive in the next financial year and the money it needs to spend.
It is the largest deficit reported by any of the 150 English local authorities.
Only last year, Tory-run Surrey County Council was engulfed in a row when it cancelled a 15% rise at the last minute following assurances from the government.
A spokesman said it was under severe financial pressure due to rising demand for our services and falling government funding.
Labour says it will boost local authorities by following the example of Preston City Council. The town hall returned almost £200million to the local economy and supported more than 1,600 jobs with measures including buying local goods and services where possible.
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