Local Government Secretary, Eric Pickles, today (5 February 2014) called on councils to take up the offer of additional central government funding to help freeze Council Tax this year.
Since 2010, the government has worked with local authorities to reduce the cost of living by freezing Council Tax, cutting average bills in England by 10% in real terms. This compares to a period between 1997 and 2010, when council tax more than doubled.
A further freeze offer is on offer this year and next, and was announced by the Chancellor in June 2013. The government is providing up to £550 million in extra Whitehall grants, to each local authority that freezes their bills from this April.
New figures published today to help residents see what their council is planning, reveal that 137 authorities have already indicated they will accept the government’s offer of extra funding. The figures also show each council’s track record since 2010. Final decisions from all local authorities will be known next month.
In a boost to direct democracy, any local authority that chooses to raise Council Tax by 2% or above must put it to a public vote said Mr Pickles. This threshold is lower than last year striking an appropriate balance between direct democracy and representative democracy ensuring local people have a democratic check over tax hikes through a binding local referendum. Local referendums could be held on the same day as the European elections on 22 May at minimal extra cost or inconvenience.
To further local accountability, from this year, every vote cast by councillors on Council Tax and budgets should be made a matter of public record and allow residents to see where elected officials have voted with their best interests at heart. Mr Pickles also encouraged the public to take to Twitter and express their #freezeplease views to their local council today.
Mr Pickles said:
Council Tax bills more than doubled, pushing the typical bill to a £120 a month from hard-working people and pensioners. Council Tax became a big worry for those trying to balance family budgets. This government has been working to give families greater financial security, taking action to keep Council Tax down.
We have given extra funding to town halls to help freeze Council Tax and handed local residents new rights to veto big local tax hikes, so local people have the final say on the amount they pay.
Since 2010, Council Tax bills have been cut by 10% in real terms across England and people haven’t been facing the threat of soaring bills. I would urge councils to take up the offer of additional funding to help freeze Council Tax this year to help their residents with the cost of living.
The list of councils that have already signaled their intention to take part in the government’s 2014 to 2015 Council Tax freeze initiative as of 5 February 2014 is available on the DCLG website.
Percentage change in Council Tax in real terms since May 2010 by English local authority, based on the Retail Price Index, is available for download.
In 1997 to 1998 average Band D Council Tax in England was £688, by 2010 to 2011 it had increased to £1,439 an increase 109%. This table shows the change in Band D Council Tax over a 20 year period between 1993 to 1994 and 2013 to 2014 at national and local authority level.
The government has provided total freeze funding of up to £5.2 billion up to 2015 to 2016, which is an unprecedented 5 years of Council Tax freezes worth potentially up to £1,100 for an average Band D taxpayer over the lifetime of this Parliament. The table available on the DCLG website provides the financial saving in Council Tax as (compared to a 5%) by English local authority.
Local authorities that freeze or reduce their relevant amount of Council Tax will receive a grant equivalent to a 1% increase on 2013 to 2014 band D Council Tax levels. This will amount to £550 million of grant in both financial years 2014 to 2015 and 2015 to 2016. The table available on the DCLG website sets out how much each council is eligible for.
Councils Tax levels remain a local decision. Government previously had the power to restrict Council Tax rises through a centrally dictated cap. This government has scrapped that through the Localism Act, which also created a new power for local residents to veto excessive Council Tax rises instead through a local referendum. A report on Council Tax referendums published today proposes a referendum principle of 2.0%, with a slightly modified principle for the City of London element of the Greater London Authority precept. This threshold is lower than last year striking an appropriate balance between direct democracy and representative democracy. The government expects that most councils will wish to freeze Council Tax, but any which set an increase of 2.0% or more will need to arrange for a binding referendum to be held. Following Royal Assent of the Local Audit and Accountability Act 2014, the referendum principles will include levies and will therefore be based on the level of Band D Council Tax. This will mean the principle will relate to the actual increase which appears on people’s bills – again reducing costs for taxpayers and preventing hikes being imposed by local quangos with no democratic mandate.
From April 2014, funding for 2011 to 2012 and 2013 to 2014 freezes is now in the main local government settlement total for future years. Funding for the next 2 freeze years will also be built into the spending review baseline. This will give maximum possible certainty for councils that the extra funding for freezing Council Tax will remain available, and there will not be a ‘cliff edge’ effect from the freeze grant disappearing in due course.
Residents are also now able to pay their Council Tax bills over 12 months rather than 10 to spread the cost of bills and help with the cost of living while the government has also announced plans to remove an unfair Council Tax surcharge on family annexes and home improvements, worth £5.3 million of additional support to extended families.