Nine in 10 councils in England to levy maximum council tax increase

The Guardian

17-03-2025

Most households in England will be charged the maximum increase in council tax for the third consecutive year after local authorities confirmed their plans before the 2025-26 financial year.
Nearly nine in 10 (88%) of 153 upper-tier authorities in England will impose a 4.99% increase in April, the most allowed without triggering a local referendum.
If councils increasing bills by 4.5% or more this year are included in the tally, the proportion rises to more than nine in 10 (94%), according to analysis by the PA news agency.
Council leaders said the increases were vital after more than a decade of funding cuts had left many local authorities suffering spending shortfalls while others more severely affected had either declared themselves technically insolvent or on course to run out of cash.
While some councils have run out of funds due to ill-judged speculative investments or, like Birmingham, a costly legal dispute, most have seen their finances overwhelmed by the rising cost of children and adult care bills.
Six English councils have been given permission by ministers to consider rises of up to 10% in an attempt to avoid bankruptcy.
Labour-run Bradford council in Yorkshire and Newham in east London were given the green light to raise council bills by 9.99% and 8.99% respectively, while Liberal Democrat-controlled Windsor and Maidenhead, which asked for a 25% rise, was allowed to raise bills by up to 8.99%.
Lib Dem-run Somerset and Labour-controlled Trafford were told that 7.4% could be the limit. Labour-run Birmingham, which is in special measures after declaring effective bankruptcy in 2023, was given the same 7.4% limit.
Bills can rise by even more when parish and town councils or mayoral combined authorities add their own precept, where no thresholds for local referendums are applied.
For just over two-thirds (68%) of top-tier authorities, it will be the third year in a row that bills have gone up by at least the maximum legal amount.
By contrast, nine councils have restricted bill increases to less than 4.5% this year. Sunderland has chosen a 4.49% increase, Kensington & Chelsea in west London 4%, Doncaster and Derby have both opted for 3.99%, while North East Lincolnshire will increase bills by 3.98%.
Derby, which is run by a minority Labour administration, had planned to increase council tax rates by 4.99%, but was forced by opposition councillors to backtrack.
Council tax in Essex will rise by 3.75% and in Rotherham by 3%. Lincolnshire will boost bills by 2.99% while Wandsworth in London has approved the lowest increase in England of 2%, representing a freeze on the main element of council tax for the third year in a row.
The south London council said its website: 'Sound financial management is at the heart of everything we do
'Wandsworth has one of the lowest levels of debt and some of the highest financial reserves in London, allowing us to freeze the main element of councils tax and invest in what matters most.'
However, the vast majority of residents in England continue to face maximum council tax increases.
The 4.99% cap, which includes a 2% adult social care precept, has been agreed by 68% of upper-tier councils in each of the past three years, with 84% having done so in 2025-26 and 2024-25.
A Ministry of Housing, Communities and Local Government spokesperson said: 'While councils are ultimately responsible for setting their own council tax levels, we are clear that they should put taxpayers first and carefully consider the impact of their decisions.
'That's why we are maintaining a referendum threshold on council tax rises, so taxpayers can have the final say and be protected from excessive increases.'
A spokesperson for the Local Government Association, which represents councils across England, said: 'Councils continue to face severe funding shortages and soaring cost and demand pressures on local services.
'This means that many councils have faced the tough choice about whether to increase bills to bring in desperately needed funding to provide services at a time when they are acutely aware of the significant burden that could place on some households.
'However, while council tax is an important funding stream, the significant financial pressures facing local services cannot be met by council tax income alone. It also raises different amounts in different parts of the country – unrelated to need.
'The spending review needs to ensure councils have adequate funding to deliver the services local people want to see.'