Average council tax bills set to top £2,000 for first time

MILLIONS of households will be hit by higher council tax increases after town halls were given greater freedom to hike bills.

Almost every local authority in England is expected to take advantage of new powers to raise council tax further without residents having to vote for it, tipping average bills over £2,000 for the first time.

The budget watchdog estimates bills will now rise by an average of 5 per cent for each of the next five years, raking in an extra £4. billion a year. It means that the standard bill for a Band D property will be £250 higher by 2027-2 than it is now, the Office for Budget Responsibility said.

Chancellor Jeremy Hunt made only one passing reference to the reforms in his Autumn Statement speech, telling the Commons

that elderly care funding will increase thanks to ‘more council tax flexibilities’.

But it was seized on by Labour’s Shadow Chancellor Rachel Reeves, who accused the Government of ‘forcing local councils to put up council tax’. She told MPs: ‘People will be forced to pay more because of the destruction that the Conservatives have wreaked on our economy.’ But Tory backbencher Mark Jenkinson said decisions on rates are taken by ‘local elected councillors’, and predicted that ‘residents under Labour councils will pay more’.

Currently town halls must hold referendums if they want to increase council tax by more than 2.99 per cent. From April this threshold will rise to 3 per cent – and 5 per cent for those that handle elderly care.

Treasury analysis suggests 95 per cent of councils will take advantage of the change.