Households across the UK face council tax hikes after local authorities were given the freedom to increase rates more than they’re usually able to.
Usually, local government tax hikes are capped at 5% and anything above this must be voted for in a referendum.
A 5% increase would already equate to as much as £110, but under new reforms, councils in dire financial situations will be allowed to raise rates beyond this threshold without residents being given a vote.
Local Government Minister Jim McMahon said: “Where a council in need of exceptional financial support views additional council tax increases as critical to maintaining their financial sustainability, the Government will continue to consider requests for bespoke referendum principles.”
Last year, four councils who were facing significant financial distress were allowed to use the bespoke measures to raise council tax beyond 5%.
Birmingham and Woking raised theirs to a staggering 10% whilst Slough increased rates by 8.5% and Thurrock by 8%.
But new measures could see a wave of other local authorities significantly increase council tax rates, with councils up and down the country dealing with bankruptcy or extreme financial distress.
Elliot Keck, head of campaigns at the TaxPayers’ Alliance, said last night: “The lifting of referendum caps for certain councils has taken its toll on millions of residents across England.
“For too long, irresponsible town halls have been bailed out without the need for proper democratic accountability.
“Ministers should be insisting that if local authorities want to go cap in hand to taxpayers they are asking for more money, not demanding it.”
Conservative sources have criticised the expected measures, claiming that Keir Starmer had called for a freeze in council tax rates whilst in opposition.
Conservative Communities spokesman Kevin Hollinrake said: “Labour has broken yet another promise, this time that they would freeze council tax.
“First, they have raised National Insurance contributions, which mean higher costs for councils and lower wages for their staff, and now they are allowing councils to increase council tax by around £110 per year, a direct breach of Keir Starmer’s pledge not to increase it by a “single penny”.
“If you thought Labour had finished taxing you, think again.”
