A cross-party group of MPs is urging incoming Labour Prime Minister Andy Burnham to scrap the requirement for councils to hold referendums before raising council tax above current limits, a change that would affect all 317 local authorities in England.
Current Referendum Rules
Under existing regulations, councils must ballot residents if they wish to increase council tax by more than 5% – or 3% for authorities without adult social care responsibilities. However, many councils have recently been granted government permission to raise taxes by much more than 5% without a vote, highlighting what MPs call the "absurdity" of the current system.
All-Party Parliamentary Group's Call
The All-Party Parliamentary Group (APPG) on local government, chaired by Labour MP Clive Betts, argues that councils should be free to set council tax without a public vote. "In the end, councils who are elected should be responsible for explaining local tax to local voters," Betts told Sky News. "Those voters will decide whether councils behave reasonably for the level of council tax they are levying."
Betts emphasised that councils were responsible for setting council tax levels "for over a century" before the referendum principles were introduced in 2011. The APPG wants to see "devolution of accountability and responsibility" alongside the transfer of powers.
Political Costs and Financial Pressures
The MPs acknowledge that allowing hikes would come with "political costs" to local authorities. "If councils facing acute financial pressures can be trusted to set higher council tax rates – some because of their own poor leadership – why can't all local authorities do so?" the MPs ask in their report.
Broader Devolution Context
Betts added that Burnham, who as Greater Manchester mayor spent nine years leading the combined authority, must ensure that devolution "must extend well beyond combined authorities to encompass local government as a whole." The call comes as Burnham prepares to take office as Prime Minister, with the APPG urging swift action to remove the referendum requirement.
