Government gives residents a real-terms Council Tax cut
This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
Residents and hard pressed families will get more help with their cost of living from the real terms council tax cut delivered by our freeze…
Residents and hard pressed families will get more help with their cost of living from the real terms council tax cut delivered by our freeze grant deal, Communities and Local Government Secretary Eric Pickles announced today.
Official statistics published today reveal that the average Band D council tax set by local authorities in England for 2012-13 will be £1444 - a 0.3 per cent change on last year.
Council tax bills more than doubled between 1997 and 2011. The majority of councils (358) have accepted the Government’s grant offer by freezing or reducing their council tax levels in 2012-13.
This is the second year the Government has made funding available for a council tax freeze for local residents, families and pensioners. Last year’s freeze saved households up to an estimated £72 on a Band D bill, and this year’s freeze is potentially worth the same saving to residents.
Every household in London will benefit from an actual cash-terms cut in council tax. Ministers also praised over twenty authorities for cutting their council tax in cash-terms. They include Hammersmith and Fulham, the Greater London Authority South Oxfordshire, Stratford-on-Avon, Windsor and Maidenhead, Chorley and Brentwood.
The Secretary of State for Communities and Local Government, Eric Pickles said:
After years of hurt when council tax bills doubled - to around £120 a month - our action is putting residents first for a second consecutive year. The overwhelming majority of councils, 358, have taken up our funding deal to freeze council tax.
The average Band D change across England is a mere 0.3 per cent. This is a real terms cut in council tax and real help to hard-working families and pensioners with their cost of living expenses.
Notes to editors
The definitive National Statistics published today revealed that the average Band D council tax set by local authorities in England for 2012-13 will be £1,444. In London it will be £1,304; in metropolitan areas £1,401; and in shire areas £1,492. Council tax bills hit £1,439 on Band D in England in 2010-11 and remained at that level in 2011-12. The statistical release can be found here: www.communities.gov.uk/publications/corporate/statistics/counciltax201213.
The 85 per cent of authorities that chose not to put up their council tax will now receive a grant worth between a 2.5 and 3 per cent increase on their 2011-12 Band D council tax. The final list of councils that have agreed to take part in the Government’s 2012-13 council tax freeze initiative can be found here: www.communities.gov.uk/documents/statistics/xls/2110558.xls (Excel, 73kb).
Without the freeze grant offer local taxpayers living in an average Band D home in England could have faced increases of up to £72 in each of the two years of the council tax freeze schemes. The value of these saving for taxpayers by area compared to a five per cent rise can be found here: www.communities.gov.uk/documents/newsroom/1786823/2028892.xls (Excel, 63kb).
More details on how the council tax freeze scheme for 2012-13 works can be found here: www.communities.gov.uk/documents/localgovernment/pdf/2000149.pdf (PDF, 32kb).
Local authorities who do not put up their council tax will receive a grant worth between a 2.5 per cent and 3 per cent increase on their Band D council tax. The amount of grant authorities will receive for freezing or reducing their council tax in 2012-13 can be found here: www.communities.gov.uk/documents/localgovernment/xls/2111493.xls (Excel, 81.5kb)
The authorities cutting their council tax in cash-terms by more than 0.1 per cent for 2012-13 are:
The Localism Act abolished Whitehall capping in England and instead gives the public the right to approve or veto excessive council tax rises in a binding referendum. This new ‘local tax lock’ gave people a vote to stop council tax going up if their local authority sought to hike the tax above a ceiling approved by the House of Commons each year will automatically trigger a referendum of all registered local electors in their area. On 8 February 2012, the House endorsed a 3.5 per cent referendums threshold for most authorities. No local authorities have reported a triggered referendum this year, though a small number opted to set a level just below the threshold.
The Government’s provisional funding settlement for English local authorities next financial year will mean councils have an average spending power of £2,186 per dwelling at their disposal. £27.8 billion will be distributed in 2012-13 in a fair and sustainable way across all parts of the country - rural and urban, metropolitan and shire. It will give more weight to areas with the highest levels of assessed need. For example, the average spending power per household in Hackney will be £3,050 compared with £1,537 in Windsor and Maidenhead reflecting the fairness of the settlement. Overall the average spending power reduction for councils in 2012-13 is expected to be limited to just 3.3 per cent or £75 per household, less than last year’s comparable figure of 4.5 per cent.
Council tax was £688 in 1997-98. This means council tax has risen over one hundred per cent - or an extra £751 a year on a Band D home in the years up to 2010-11 before the freeze grant was offered. Since all other Bands are set as a percentage of Band D, homes in every band have seen their bills double. Average Band D council tax and percentage change between 1993-94 and 2012-13 are shown below:
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