New data gathered from England’s top-tier councils suggests that nine in ten areas are set to experience a council tax rise of at least 4.99% this year. Figures indicate that the vast majority of local authorities have opted for the maximum increase allowable without triggering a local referendum, highlighting the ongoing financial pressures faced by councils across the country.
Widespread adoption of maximum increase
An analysis of 139 top-tier councils in England reveals that 85% of authorities are planning to increase council tax by 4.99%. The figure rises to nearly 90% when factoring in six councils experiencing acute financial distress, which have been granted special permission to exceed this threshold without requiring a local vote.
Of the councils that have disclosed their plans, 122 are awaiting approval from full council meetings, while 17 have already confirmed their increases. Only 14 councils remain yet to declare their intentions, but given historical trends, it is unlikely that proposals will be overturned at this stage in the budget-setting process.
Few councils opting for smaller increases
Just 15 councils have put forward plans for increases below 4.99%. Among them, Barnet in north London and Warrington in Cheshire have proposed a 4.98% rise, while Wandsworth, in south London, has set its increase at a notably lower 2.00%.
Only six other councils have opted for increases of 4% or less. These include:
- Kensington & Chelsea, London (4.00%)
- Doncaster, South Yorkshire (3.99%)
- North East Lincolnshire (3.98%)
- Essex (3.75%)
- Rotherham, South Yorkshire (3.00%)
- Lincolnshire (2.99%)
Regional breakdown of increases
All upper-tier councils in the East Midlands, eastern England, the North East, and the South West have now either proposed or confirmed their tax increases. In the East Midlands, eight out of ten councils have opted for the maximum rise, while nine out of ten in eastern England have done the same.
In the North East, only South Tyneside and Stockton-on-Tees have chosen to set their increases below 4.99%, both opting for 4.95%. Meanwhile, all 15 councils in the South West have now announced their plans, with only Torbay (4.75%) and Wiltshire (4.50%) keeping their increases below the cap.
Several councils facing severe financial difficulties have been granted permission to impose higher increases. Somerset has been allowed to raise council tax by 7.50%, while Newham in London and Windsor & Maidenhead in Berkshire have both received approval for an 8.99% rise. Similarly, Birmingham and Trafford in Greater Manchester have been permitted to increase rates by 7.49%.
London’s council tax plans
Across London’s 33 local authorities, six are yet to reveal their council tax plans. Among the 27 that have declared their proposals, 23 have opted for the full 4.99% increase. Notable exceptions include Kensington & Chelsea (4.00%), Barnet (4.98%), and Wandsworth (2.00%).
Wandsworth has now frozen the main element of its council tax for the third consecutive year, maintaining what is said to be the lowest council tax rate in the country. Council leader Simon Hogg defended this decision, stating:
“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 council tax and invest in what matters most to you – cleaner streets, safer neighbourhoods, and a stronger community.”
Council tax burden on households
New analysis has found that the poorest households are dedicating an increasing share of their income to council tax. According to the Resolution Foundation, the poorest fifth of UK households paid 4.8% of their income on council tax in 2020-21, a sharp increase from 2.9% in 2002-03.
By contrast, the wealthiest fifth of households spent only 1.5% of their income on council tax. The think tank argues that the current system disproportionately burdens lower-income residents, particularly as council tax rates in England and Scotland remain based on 1991 property values.
Lalitha Try, an economist at the Resolution Foundation, criticised the existing framework:
“This terribly designed tax increasingly resembles the very thing it was meant to replace – the dreaded poll tax.”
Calls for reform
The widespread adoption of maximum council tax increases has reignited discussions on local government funding and the sustainability of the current system. Critics argue that councils reliant on annual tax hikes to balance budgets are symptomatic of deeper structural issues in local government financing.
Meanwhile, some council leaders have questioned the fairness of allowing financially struggling councils to impose higher increases, while others are expected to operate within stricter limits. Lincolnshire council leader Martin Hill expressed frustration over the disparity:
“We do feel there is an element of penalising success and rewarding failure. We have always done the right thing at the county council, lived within our budget, and kept our council tax low. It is frustrating that other councils can’t seem to manage to do that at the same time we live within our means.”
With rising inflation and continued pressure on public services, the coming years are likely to see continued debate over council tax policies and broader funding strategies for local authorities across England.