Local authorities across the country are understandably looking to avoid a record hike in council tax. They want it to increase by 5% annually to pay for important local services, including policing. These expected increases are the result of a three-year Spending Review. It assumes councils will be allowed to increase their council tax rates to the maximum allowed without central government approval.
As it stands in legislation, local councils can freely choose to increase local council tax by 5% annually. This cap was set by the former administration and is unchanged under Chancellor Rachel Reeves. As the review highlights, councils should be free to decide whether or not to adopt the maximum increase. As Louise Gittins, chair of the Local Government Association, reminded the public, this decision isn’t required.
“It is a cap, councils don’t have to increase council tax by 5%,” – Chancellor Rachel Reeves
This Spending Review announces not only increases in funding, but new fiscal regimes. It has a 3% core council tax referendum principle and a 2% adult social care precept. As councils go through these cuts, they need to weigh the need for funding against putting a larger burden on taxpayers.
The overall increase in local authority core spending power is estimated to be 3.1% a year on average over 2023-24 to 2028-29. Yet the government’s calculations show an enormous gulf. They prove that the power of police spending will only increase by an average of 2.3% a year when accounting for inflation. This discrepancy between intention and reality has been particularly alarming to all stakeholders including advocates, in light of the continuing federal austerity measures.
Tiff Lynch, from the Police Federation for England and Wales, said the Spending Review had left police dismayed. She emphasized how it fails to account for the impact of 15 years of austerity on policing. Lynch warned that cuts would inevitably spell more damage to frontline services and increasingly angry public opinion.
“This Spending Review should have been a turning point after 15 years of austerity that has left policing and police officers broken. Instead, the cuts will continue and it’s the public who will pay the price.” – Tiff Lynch
Despite these challenges, the government’s Spending Review includes some positive elements, such as enhanced support for children’s services, affordable housing initiatives, and investments in transportation infrastructure. It reveals a concerning trend: the Ministry of Housing, Communities and Local Government will face a 1.4% real-terms cut in its day-to-day budget.
Gittins remarked on the tough choices facing councils as they strive to maintain essential services while grappling with increasing costs.
“Many will continue to have to increase council tax bills to try and protect services but still need to make further cutbacks,” – Louise Gittins
