Council tax across England will rise, on average, by the smallest amount ever in the coming financial year, according to analysis of councils’ draft budgets carried out by the LGA.
The annual survey of 105 councils suggests an average increase of 1.6%, the lowest since council tax began in 1993. Outside London the average is slightly higher at 1.9%.
With the retail price index (RPI) at 3.7%, the increase would represent a real-terms cut of 2.1%.
Sir Jeremy Beecham, vice-chairman of the LGA, said: “Everyone is facing a squeeze on their finances in the current economic climate and no one likes paying council tax.
“That is why councils have been doing all they can to keep council tax rises to a minimum. “Councils have had to take tough decisions to carefully balance the need to protect essential frontline services while providing value for money for the taxpayer.”
The new figures, representing a rise of just 36p a week for a band D household, come at a time when councils are dealing with both a huge drop in income and a steep rise in the demand for council services.
A number of councils have announced they are proposing to cut council tax, including Windsor and Maidenhead, Havering, St Albans and Calderdale.
Councils have been hit by a £4bn deficit in income over the past two years, the equivalent of losing almost £11m every day compared with 2007/08.
Sales of land, council buildings and other capital projects have fallen by £2.7bn, interest earned on councils’ cash deposits has fallen by £1.3bn due to low interest rates, and income is also down from planning applications, car parking and leisure services.
Despite that, councils have been working hard to promote benefits and services available to support people during the downturn. Anyone struggling to pay their council tax bill is urged to contact their town hall to ensure they are getting the reductions they are entitled to.
A total of £1.8bn of council tax benefit goes unclaimed every year.
Sir Jeremy added: “The fact that councils have managed to keep council tax rises to an all-time low is further evidence that the government’s capping powers are unnecessary and irrelevant to the needs of local people.”
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