Could a Council Tax Rise Be on The Horizon?

12 October 2021|Related :

Council tax may be set to soar by £500 to cover the cost of social care over the next three years. 

Prime Minister Boris Johnson has said he is “acutely conscious” of the precarious finances of local authorities as their demands to raise council tax in order to afford social care increase. 

Councils have been warned they require an additional £2.6 billion a year in order to sustain present levels of social care. Johnson insisted the Conservative Party Government would make sure all local authorities could meet the surging costs whilst also acknowledging their finances have been depleted during the coronavirus pandemic over the last 18 months. 

According to the Local Government Association (LGA), this means the current average Band D bill of £1,898 would need to rise 25% (£475) by 2025. However, this is unlikely to be made possible as any rise above 5% must be put to a referendum of local people and would most likely be rejected. 

However, the LGA suggested councils may have to enforce this if no alternative support is provided by the government, especially as Boris Johnson’s plans to ‘fix’ social care aren’t expected to be enough particularly in the short-term. Between now and 2025, the measures are said to provide £5.4billion to care over the next three years, covering just two thirds of the £8.3billion black hole. 

The LGA has also said that the £8bn figure doesn’t even cover paying fairer wages to care workers or investing in early interventions to prevent families and young people from falling into crisis. The chairman of the Association, James Jamieson, said: 

Councils continue to face severe funding and demand pressures that will stretch the local services our communities rely on to the limit. Securing the long-term sustainability of local services must therefore be the top priority in the Spending Review.

If we are to come out of this pandemic with a society that is truly levelled up, the vital services that councils provide must be at the heart of it. Councils need certainty over their medium-term finances, adequate funding to tackle day-to-day pressures and long-term investment in people and transforming places across all parts of the country to turn levelling up from a political slogan to a reality that leads to real change for people’s lives.”

They urged Chancellor Rishi Sunak to provide several years of guaranteed funding in his Spending Review at the end of October and called for a £1bn ‘Community Investment Fund’ each year to allow councils to support their people and prioritise as they please.

Personal Tax Planning

At Ryans, we understand that can can be, well, taxing. That’s why we offer a range of personal tax planning services to help you make more informed decisions for the future whilst ensuring you’re compliant with all of the latest laws and regulations.

With simple, clear and thorough advice, we can help make sense of your position now and plan for the future. Sound good? Don’t delay, contact us today for financial clarity.

Made by Statuo