Council tax bills are set to rise in the south to fund the north under major Labour reforms, according to reports. Deputy Prime Minister Angela Rayner will set out plans tomorrow for a “progressive” redistribution of local authority funding from central government.
She will unveil a new formula aimed at allocating the money to areas with the highest need. The changes will mean a drop in cash for wealthier councils, mainly in London and the South East, forcing them to raise council tax or cut public services to make up the shortfall.
But a senior figure in local government warned the move would be “deeply divisive” and create significant winners and losers.
They told the Times: “There is no doubt at all that it is going to be polarising.
“For a lot of councils in richer parts of the country the current system works quite well for them and they’re going to lose funding.
“A lot of councils in rural areas are also worried that they will see their funding diverted into deprived urban areas.”
The Ministry of Housing, Communities and Local Government argued that the present system has resulted in “perverse outcomes, where some authorities are struggling to provide basic services whilst others are better off”.
A spokeswoman said: “Individual councils remain responsible for setting their own council tax levels each year, and the government is clear that they should put taxpayers first.”