The government has granted special permission to seven local authorities across England to increase their council tax rates beyond the standard 5% cap, acknowledging the severe financial challenges facing many councils.
Government Recognises Financial Strain on Local Authorities
In a significant move, ministers have permitted selected councils to exceed the usual council tax increase limit, stating this decision directly responds to the difficult financial circumstances many local authorities are currently navigating. The government emphasised that allowing these exceptions recognises the substantial pressures on council budgets and frontline services.
Which Councils Can Increase Tax and By How Much?
The permissions vary significantly between different local authorities:
- Shropshire, Worcestershire and North Somerset Councils have received approval for the highest increases, with permission to raise their council tax share by a maximum of 9%.
- Trafford, Warrington and Windsor and Maidenhead Councils can implement increases of up to 7.5%.
- Bournemouth, Christchurch and Poole Council (BCP Council) has been granted permission for a 6.75% increase.
Addressing Budget Gaps and Service Pressures
BCP Council has highlighted particular financial challenges, forecasting a £10.5 million bill for interest on borrowing required to provide support and education for children with special educational needs and disabilities (SEND). Councillor Mike Fox commented on the situation, stating: "While at face value this is good news, we must recognise that this simply closes a budget gap we were filling with reserves. Our finances remain tight and pressures on our frontline services continue."
Councillor Lynne Jones previously explained that some boroughs needed to raise bills dramatically because they historically maintained "some of the lowest council taxes in the country."
Political Responses and Industry Commentary
Alison McGovern, the Local Government Minister, stated that the finance settlement demonstrates the government's commitment to improvements that would enable councils to become "agents of renewal in building a new, better country."
Louise Gittins, Chair of the Local Government Association which represents councils across England, welcomed the partial write-off of SEND debts, noting this action removes the immediate threat of insolvency for many local authorities. She emphasised: "This is recognition that these costs are not of councils’ making and have accrued due to a broken system that is urgently in need of reform. However, fully writing off historic and future high needs deficits remains critical."
Sir Stephen Houghton, Chair of the Special Interest Group of Municipal Authorities, expressed strong support for the uprated recovery grants, stating: "We strongly welcome the additional money being targeted to places with significant deprivation and needs."
The situation in Worcestershire has been particularly highlighted, with the council's Reform leadership openly admitting their finances are in "a mess", underscoring the severity of financial challenges facing some local authorities.
