Local Government Secretary Eric Pickles today praised councils that have already signalled they intend to help hard pressed families cope with the cost of living by signing up to the Government’s council tax freeze offer.
With over a month to go until final budget decisions are taken, press reports have shown that 152 councils in England are preparing to freeze or reduce council tax next year. Councils which have indicated they are going further and cutting council tax in cash terms include Hammersmith and Fulham, South Oxfordshire, Stratford-on-Avon, Tendring and Windsor and Maidenhead.
Council tax bills more than doubled since 1997 until last year’s freeze. This is the second year the Government has offered support to freeze council tax to support local residents, families and pensioners.
The Government has set aside up to £675 million for local authorities in England to help keep council tax down. Last year’s freeze saved households up to an estimated £72 on a Band D bill, and this year’s freeze could potentially do the same.
This new support builds on the offer taken up by all councils last year boosting what they could get over four years to £3.3 billion if they hold council tax for a second year.
Local Government Secretary Eric Pickles said:
I would like to congratulate the 150 or so local authorities, which have already signalled their intent to freeze or cut council tax this year.
This will be welcome news for many council taxpayers who’ve seen their bills double since 1997.
It is very early in the budget setting process, and I would fully expect this number to increase significantly over the next few weeks.
Every councillor still to decide has an obligation to keep the living costs of their residents down and take the freeze money. A vote against a freeze is a vote for a punitive tax-rise when typical bill are already around £120 a month.
Notes to editors
The list of councils that have signalled their intention to take part in the Government’s 2012-13 £675 million council tax freeze initiative as of 25 January 2012 is available here: www.communities.gov.uk/documents/newsroom/pdf/2077094.pdf (PDF, 38kb) .
Council tax bills hit £1,439 on Band D in England in 2010-11. This year, 2011-12, the average Band D bill set by local authorities remained at £1,439. In London it was £1,308; in metropolitan areas it was £1,399; and in shire areas it was £1,484. 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. Since all other Bands are set as a percentage of Band D, homes in every band have seen their bills double.
The value of saving for taxpayers by area from two years of the council tax freeze scheme compared to a five per cent rise can be found here: www.communities.gov.uk/documents/newsroom/1786823/2028892.xls (Excel, 63kb).
Local authorities who do not put up their council tax will receive a grant worth 2.5 per cent of their council tax income. The freeze means local taxpayers living in an average Band D home in England could save up to £72. More details on how the council tax freeze scheme works: www.communities.gov.uk/documents/localgovernment/pdf/2000149.pdf (PDF, 32kb).
The Localism Act abolishes Whitehall capping in England and puts local referendums in its place. This gives the public the right to veto excessive council tax rises. Councils that set council tax increase above a ceiling approved by Parliament each year would automatically trigger a referendum of all registered local electors in their area. This year the proposed new ‘local tax lock’ allows people a vote to stop council tax going up if their local authority refuses to freeze bills and hike the tax by more than 3.5 per cent. Parliament will be asked to endorse the final vote threshold before councils set their annual budgets in the spring.
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 household 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.
Average Band D council tax and percentage change between 1993-94 and 2011-12 are shown below:
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