United Kingdom

Increasing council tax bills above £2k won’t save services, warn councils

It is thought Jeremy Hunt will announce an increase in council tax, pushing many to pay over £2,000 (Picture: Shutterstock)

Jeremy Hunt’s plan to push typical council tax bills beyond £2,000 will not save vital services, town hall chiefs warn.

The chancellor will axe rules that limit tax rises to four per cent in his autumn statement. He hopes allowing councils to raise bills by up to five per cent – a £100-a-year rise on a Band D property – will boost civic budgets by £4billion.

But double that is needed as many local services face an ‘existential crisis’ amid soaring inflation, say councils.

‘Reserves can only be spent once, a local service cannot be cut twice,’ said James Jamieson of the Local Government ­Association. ‘Rising demand – and extra costs to provide them – leave councils having to make significant cuts to services, such as care for older and disabled people and protecting children.’

A poll by the LGA found 88 per cent of English councils plan to dip into reserves or cut services to plug funding gaps. They have had to find an extra £2.4billion this year due to rising inflation, energy prices and National Living Wage increases.

Many councils across the country will struggle to sustain vital services (Picture: Shutterstock)

A government spokeswoman said: ‘We understand the pressures councils are under and have made available an additional £3.7billion to ensure they have the resources to deliver vital services.’

Meanwhile, Mr Hunt says the national debt has now reached 98 per cent of GDP.

MORE: How to check your Council Tax band – and how are they measured?

‘We are spending £22billion more on debt interest than last year. That’s more than the budget of the Home Office,’ he told the Commons’ treasury committee.

He is expected to announce £60billion of tax rises and spending cuts tomorrow – but benefits and pensions will rise in line with inflation, say Treasury sources.

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