Millions of households will be hit with council tax hikes to pay for Angela Rayner's Government funding reforms

Daily Mail​

17 hours ago

Households in wealthy areas could be hit with huge council tax rises under Angela Rayner 's plans to divert more funding to deprived regions, experts warned last night.
Reforms being brought in by the Deputy Prime Minister will mean many councils in the South – including London and the Home Counties – face swingeing cuts to their core budgets.
Those in the Midlands and North can expect to see large increases.
A report by the Institute for Fiscal Studies suggests the funding changes will see around a quarter of councils in England lose money in real terms – creating big 'winners and losers' as ministers try to address perceived unfairness in levels of funding across the country.
However, the strength of cuts in wealthy areas that have historically kept council tax bills low means they will have less money to spend on vital services such as bin collections and elderly care – even if they increase bills by the maximum amount currently allowed.
The report suggests that local authorities with low council tax that will lose funding should be able to make it up by hiking their rates on households even further.
Kate Ogden, a senior research economist at the think-tank and the report's author, said: 'The Government should consider giving highly affected councils which currently have low council tax rates greater flexibility to bring their council tax bills up to more typical levels to offset funding losses.'
Sir Keir Starmer's own council, Camden in north London, will be hit by the reforms when taking inflation into account, the IFS predicted.
Overall spending will fall for 186 councils and rise by the same total sum for 161. One in ten will see a fall in overall funding, while one in ten will see an increase of 10 per cent or more.
The overall Government spend on local authorities will not change, as the reforms are phased in across three years, from 2026/27 to 2028/29.
London will gain the least under the changes with an increase in funding of 8 per cent in the next three years.
Outside the capital, the East Midlands (22 per cent) and Yorkshire & the Humber (19 per cent) will see the biggest increases in funding, with the South East the smallest at 13 per cent.
A spokesman for Ms Rayner's Ministry of Housing, Communities and Local Government said it was 'taking decisive action to reform the funding system so we can get councils back on their feet and improve public services'.