Council Tax Rises Above 5% Cap for Millions in England

Millions of households across England are bracing for steep council tax hikes, as the government grants six local authorities permission to raise rates well beyond the usual limits. The Council Tax Rises Above 5% in Bradford, Newham, Windsor and Maidenhead, Birmingham, Somerset, and Trafford, marking a significant shift from the standard cap. Typically, councils responsible for social care can increase tax by up to 4.99% without holding a referendum, while others are capped at 2.99%. However, in a recent announcement, Deputy Prime Minister Angela Rayner confirmed that these councils will all exceed this threshold.

Bradford Council leads the charge with a 10% increase, while Newham and Windsor and Maidenhead are set to implement 9% hikes. Meanwhile, Birmingham, Somerset, and Trafford councils will raise their rates by 7.5%. Rayner defended these decisions, emphasising the need to “prevent these councils falling further into financial distress.” She acknowledged the delicate balance between securing necessary funding and protecting taxpayers from excessive financial strain.

Not all requests for higher tax increases were approved. Hampshire Council’s bid to raise taxes by 15% was blocked, signalling that while the government is flexible in certain cases, it is not willing to greenlight extreme rises without careful consideration.

Alongside these changes, the government announced that councils will have access to over £69 billion in funding this year—a 6.8% rise compared to 2024-25. This package ensures that no council will see a reduction in core spending power. Of this funding, more than £2 billion will come from direct grant support, supplementing revenue from council tax. Additionally, councils will receive extra resources to cover the rising costs of employer National Insurance contributions.

Despite these measures, concerns remain. Louise Gittins, Chair of the Local Government Association, described council finances as “extremely challenging,” stating that even with the additional £2 billion, funding “still falls short of what is desperately needed.” Gittins warned that councils may still face tough decisions, including further cuts to essential services, even as residents grapple with higher tax bills.

The funding allocations also left mayoral combined authorities without specific support, meaning they will need to find alternative revenue streams to meet their financial obligations. As councils navigate this complex financial landscape, calls for a more sustainable funding model are growing louder, with many urging the government to provide “significant and sustained increases in overall funding” in future spending reviews.

Visit Local Government Association for more on council funding and financial support.

For more updates on local government funding and how these changes might affect your area, visit EyeOnLondon. We’d love to hear your views in the comments below.

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