Council tax hikes set to send average above £2,000

The Chancellor announced that councils can raise tax by 5% without holding a referendum (3% plus an additional 2% if they have social care responsibilities). The move aims to meet massive shortfalls in care funding – along with rising costs on all sides. It means band D council tax could rise from an average of £1,966 to as much as £2,064.

Sarah Coles, senior personal finance analyst, Hargreaves Lansdown said: “This is the sound of the other shoe dropping. Ever since the government highlighted the massive shortfall in care funding, pledged to fill it with extra National Insurance, and then u-turned on the hike, we’ve been waiting to see how this particular black hole was going to get filled.

“It turns out that taxpayers will be coming to the rescue, with the biggest hike in council tax since 2018. By historic standards it’s not a massive rise: in the ten years between 1995 and 2005 council tax rises hit at least 5% a year – and in 2003 they were over 12%. However, given how much we’re seeing all our costs rise on all sides, this is the last thing we need.

“Back in 1990, people rioted in the streets at the thought of a poll tax at £357 per person – which, with two people in the household, would come to £714. Taking inflation into account, that’s the equivalent of £1,613 today – we passed that level in 2018, and next year will see average council tax rise above £2,000.”