Families hit by 5pc council tax blow

Critics say move fails to plug funding gaps but will ‘clobber’ some who will ‘pay more but get less’

FAMILIES face a 5 per cent council tax rise next year after local authorities were cleared to impose a “clobbering” increase that dwarfs inflation.

Critics warned the higher levy would fail to plug council funding gaps, meaning households would “pay more but get less” as key services faced cuts.

Robert Jenrick, the Communities Secretary, yesterday announced that local authorities in England could continue to increase tax by up to 2 per cent without a referendum and boost the social care precept by up to 3 per cent. He said it lay in the hands of individual councils to decide whether to enact the increases. If they did it would see their core spending power increase in cash terms by up to 4.5 per cent, which would also amount to a real-term rise, he claimed.

Setting out the provisional local government finance settlement for 2021/22, he told the Commons it “makes an extra £2.2 billion available to fund the provision of critical public services including adult and children’s social care”.

Steve Reed, the shadow communities secretary, warned that local authorities faced a “vast” funding gap that would “inevitably” lead to job losses, cuts to key front-line services and the closure of more libraries and youth centres.

He branded it “shocking” that ministers proposed a council tax hike over twice the rate of inflation, particularly when “the country still faces an unprecedented health crisis and the deepest recession for 300 years”.

The Government’s proposals would “clobber hard- working f amilies” already feeling the strain, Mr Reed said, adding that “in return, those taxpayers will get fewer services”.

Labelling council tax “regressive”, he explained: “A 5 per cent increase in Surrey raises £38 million while a 5 per cent increase in Blackburn with Darwen raises just £2.8 million.

“So if you’re an older person living in a less wealthy area – such as one of the Red Wall seats – you’re going to see your Conservative MP tax you more, but cut the core services you rely on.”

In response, Mr Jenrick said councils had spent £4 billion of the £7.2 billion made available f or t he Covid- 1 9 response – and the authorities projected they would spend almost £6.2 billion by

March. On council tax, he added: “Local councils are not under any obligation to increase council taxes.

“And we only have to look at the record of the last Labour government to see what happens under Labour – council tax doubled, under this Conservative Government council tax is lower in real terms today than it was in 2010/11.”

James Jamieson, the Local Government Association chairman, welcomed the extra money announced in the settlement, but warned: “More than 85 per cent of the potential core funding increase next year is dependent on councils increasing council tax by up to 5 per cent next year.

“This leaves councils facing the tough choice about whether to increase bills to bring in desperately needed funding to protect services at a time when we are acutely aware of the significant burden that could place on some households.” Meanwhile, Jonathan Carr-west, chief executive of the Local Government Information Unit think tank, heaped censure on the settlement.

“Too late in the day for councils to make strategic decisions about spending. Too little money for them to safely balance the books,” he said.

He added: “Once again, the political risk is passed on to local government with a ‘spending boost’ that is insufficient to meet their needs and which relies on councils boosting council tax to the max, drawing down the wrath of their hard- pushed residents while allowing the Government to shelter behind the fiction that they are not raising taxes.”

Councils that hope to make ends meet next year will have “no choice” but to implement 5 per cent tax rises, he warned, dismissing Mr Jenrick’s suggestion that it was optional.