Facing financial strain, some local councils in England are exploring ways to raise council tax beyond the standard 5 percent limit from April 2024. They plan to leverage a legal loophole known as a Section 114 notice, which allows them to propose increases if they declare they cannot operate within their existing budget. This could result in significant hikes for residents, with some areas potentially seeing increases as high as 25 percent. The Taxpayers’ Alliance, a campaign group advocating for lower taxes, has criticized these plans, calling them a sign of 'spending addiction' by local authorities.
Cash-strapped councils facing the possibility of bankruptcy may consider raising council tax es beyond the standard 5 percent limit from April. Councils can use a Section 114 notice to propose council tax increases above the central government limit. Around the country, councils plan significant rises of between 9.99 percent and 15 percent from April in order to take advantage of a legal loophole.
This loophole allows councils to raise council taxes beyond the standard limit if they declare they cannot operate within their existing budget. Any request to raise council tax beyond the threshold is considered by central government on a case-by-case basis. Around 4.4 million residents in eight local authorities are set to be impacted by council tax rises beyond the official limit. A 5 percent limit was set for authorities for 2023-24, but the previous government permitted several councils to increase council tax above that threshold. Croydon was allowed to raise its rates to 15 percent, while Thurrock and Slough were allowed to increase theirs to 10 percent. The Taxpayers’ Alliance, which has been campaigning in Windsor and Maidenhead against their proposed 25 percent increase, said: “Taxpayers shouldn’t be forced to bankroll town halls’ spending addiction.” The Lib Dem-run Windsor and Maidenhead’s planned rise is the highest among the eight councils looking to exceed the standard limit, which would add £451 on average to taxpayers’ bills. Benjamin Elks, grassroots development manager at the Taxpayers’ Alliance, said: “Local taxpayers are fed up with having to pick up the tab for reckless councils. As hard-working households across the country tighten their belts, local authorities are refusing to rein in their out-of-control spending, squandering cash on pointless pet projects. It’s high time town halls focused on delivering core services efficiently, not asking local residents to keep funding their dangerous addiction to spending.” Conservative-led Hampshire county council, Labour-run Bradford council and Lib Dem-run North Somerset are all planning rises of 15 percent. If approved, Band D council tax payers in Europe’s largest local authority will see their bills rise by a combined £400 over the two-year period. In a letter to county councillors, Hampshire’s chief executive Carolyn Williamson said that “despite being a well-run, high-performing council that manages its resources with the utmost care and precision, we can no longer make enough savings and still deliver our statutory responsibilities”. She added that by 2026-27, a Section 114 notice “becomes a real possibility if there are no deep-seated changes to the way resources are allocated.” A Ministry of Housing, Communities and Local Government spokesperson said reports there could be council tax rises above 5 percent were “speculation”. They said: “No decisions have been made on council tax increases and we will only consider agreeing to requests for rises above 5 percent in exceptional circumstances, in line with the previous government’s position. Councils are ultimately responsible for setting their own council tax, and we will put taxpayers at the forefront of any decision.
Council Tax UK Local Government Section 114 Notice Budget Crisis Tax Increases Taxpayers' Alliance
United Kingdom Latest News, United Kingdom Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Blackpool Council Faces Tax Hikes and Service Cuts Despite Funding BoostBlackpool's Conservative opposition leader warns of council tax rises and cuts to services despite a £17 million funding boost for the town hall. Cllr Paul Galley criticizes the Labour council's financial management, pointing to overspending in key areas and the impact of rising national insurance on local budgets. He predicts residents will face reduced services and a maximum council tax increase to close a projected £21.1 million budget gap.
Read more »
Greater Manchester Police Council Tax Hikes To Fund ImprovementGreater Manchester mayor Andy Burnham is increasing the police element of council tax bills to fund improvements in Greater Manchester Police (GMP). The increase will be £14 for band D properties, bringing the annual cost to over £270. While this is one of the lowest increases in the country, it means a band B home will now pay over £200 in council tax for the first time.
Read more »
Council Tax Hikes: English Authorities Seek Permission for Record IncreasesEnglish local authorities are facing a financial crisis, prompting requests for extraordinary council tax hikes. The potential increases, if approved, would be the largest in two decades, raising concerns about the impact on already strained household budgets.
Read more »
Telford & Wrekin Council Faces 'Challenging' Cuts and Council Tax RiseTelford & Wrekin Council warns of 'challenging' cuts and a potential council tax rise to address a growing funding gap. The council has already made significant savings but faces continued pressure from increasing demand for services and a challenging economic climate.
Read more »
Ludlow Town Council sets out budget including near 10 per cent rise in council tax preceptA Shropshire town council has set out its budget priorities, which includes nearly a 10 per cent rise in its share of council tax.
Read more »
Bradford Council Seeks Up To 14.99% Council Tax Hike To Tackle Financial CrisisBradford Council has applied to the government for permission to raise council tax by as much as 14.99% to address a growing financial crisis. This proposed one-off increase has sparked concern and shock among residents and opposition councillors, but the council argues it is necessary to avoid higher interest payments and future cuts.
Read more »