GB News: Expert discusses potential rise in Council Tax
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Two-thirds of councils in England have said they are considering a rise in council tax to help fund services. Many other councils said they were unable to rule out the increase as well. This comes as households also face an increase in National Insurance from April.
It is believed the increase will help pay for health and social care, with the bulk of the money due to go to the NHS.
However, many council leaders have told the BBC they will still face funding shortfalls and therefore council tax increases are inevitable.
Lisa Nandy, shadow secretary of state for Levelling Up, Housing and Communities, warned the “double-whammy” will leave people worse off.
She said: “It will be the communities the government promised to ‘level-up’ who will be hit hardest – in towns and villages across the country, with older populations where people are already struggling to make ends meet.
“Instead of delivering for people in these communities, the government’s ‘double whammy’ National Insurance and council tax will leave people worse off.”
The BBC contacted 152 councils in England who are responsible for social care.
Out of the 152, 121 responded, with two-thirds saying they are considering a tax rise from next April.
It is believed final decisions will be taken after councils get more detail about the funding they will receive from the Government.
Research Economist Kate Ogden said: “The biggest uncertainty for budgets next year is probably the impact of Covid which will continue to mean falls in incomes and significant spending by councils on the public health response.
“Councils are being allowed a smaller council tax rise than they have been allowed in recent years, but they’ve also been promised lots of extra funding from the government.
“It’s hard to say whether this will be enough, although we can expect to see many councils put up their council tax bills in an attempt to stem the gap.”
The Local Government Association said councils were aware of the burden tax increases placed on households.
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Councillor Shaun Davies, chair of the Local Government Association’s Resources Board, said: “In recent years, the government has relied on council tax-raising powers to increase councils’ core spending power.
“While council tax is an important funding stream, it has never been the solution to the long-term pressures facing our local services, raising different amounts in different parts of the country, which is not related to need.
“Increasing council tax to pay for social care is a double whammy for hard-pressed residents, who may also feel they are shelling out twice for a service now that the Health and Social Care Levy is being introduced.”
Many council leaders in the north of England said relying on council tax for funding leaves them at a disadvantage compared to councils in the south.
Paul Dennett, Labour Mayor of Salford, told the BBC: “Different parts of the country can raise more money through council tax because they have properties that are in higher council tax bands paying more in council tax, but also different parts of the country have different demands on services.
“Salford is the 18th most deprived area in the country, and as a consequence of that the demand for public services is higher in places like Salford than it is in other parts of the country.”
A Government spokesperson said: “We are committed to reforming health and social care and are investing an additional £5.4billion over three years, with £1bn allocated, to improve the lives of those who receive care.
“We are also providing an additional £1.6billion in core local government funding in each year of the next Spending Review, which will allow councils to increase their spending on vital public services, such as Children’s and Adults Social Care, to ensure they respond effectively to rising demand.”
Councillor Tim Oliver, chairman of the County Councils Network and Conservative leader of Surrey, added: “We recognise that our residents will be feeling the pinch after a tough 18 months with the cost of living rising, whilst some may be facing uncertain employment prospects.
“County residents already pay the highest rates and those county leaders that do propose rises of the maximum permitted will be doing so as they have little choice other than to substantively reduce local services.”
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