Households in England will pay on average an extra £81 in council tax from April, in the steepest increases for 14 years, as cash-strapped local authorities struggle to fill gaping holes in their budgets caused by years of austerity.
The Chartered Institute of Public Finance and Accountancy (Cipfa), which represents public sector finance officers, said the findings of its survey highlighted the increasing financial pressures faced by councils as funding cuts started to bite.
Councils were facing “crunch time” as they grappled with shrinking budgets and increasing demand for adult and children’s social care services, the institute said. Local authority funding has reduced by 40% over the past six years.
Northamptonshire county council – which declared effective bankruptcy last month and this week passed a budget containing swingeing cuts from April – was a “test case” that would show how far councils could continue to meet their legal obligations to provide core services, Cipfa said.
Local authorities in the south-east of England outside London and in the north east will have the biggest average band D council tax rise, at £90 a year, the survey found. The lowest average rise will be in Greater London, where bills will go up by £56.
Almost three-quarters of authorities are opting to raise general council tax by 2.99%, the maximum allowed without the need for a local referendum. Councils with social care responsibilities can raise rates by an additional 3%.
There are wide regional variations in total band D council tax bills: ratepayers in the north-east of England pay an average of £1,799, compared with an average of £1,194 in inner London.
Earlier this week the Local Government Association warned that although council tax increases, coupled with an additional local tax ringfenced for social care in some areas, would raise an estimated £1.1bn for English councils in 2017-18, this would not prevent deep cuts to services such as libraries and children’s centres.
Rob Whiteman, Cipfa’s chief executive, said: “This sharp rise in council tax across the country reflects the enormous financial pressures many local authorities are currently under. Local government has made by far the biggest efficiencies in the public sector since 2010, but now it feels like crunch time, with the consequences of earlier funding cuts really beginning to bite.
“The spending freeze now in place for Northamptonshire, and inevitable cuts to come, will be a test case for what the minimum services can be that a council is required to deliver.
“But looking further across the country, children’s and adult social care are the main focus of resources for many town halls – set this against the phasing out of government grants and widespread use of reserves, it is clearly time for an honest conversation about what services councils should realistically be expected to deliver.”
The financial pressures have led many councils to set what critics have called “pay more get less” budgets for 2017-18, in which children’s centres, libraries, leisure centres, parks, museums, road repairs and gritting services are cut, while extra funds are raised through council tax and parking charges.
