Councils in England would need to increase council tax by 20 per cent over the next two years to plug a gap in Government funding, analysis suggests. The shortfall in funding is too big to be tackled by raising council tax alone, warns the Local Government Association, as its analysis suggests councils face a £3.4 billion funding gap in 2023-24, rising to £4.5 billion in 2024-25.
To plug the gap, it says councils would need to increase council tax by a fifth over the next two years – which is “neither sustainable nor desirable given the current cost of living crisis”. Current rules mean local authorities must trigger a referendum to increase council tax by more than 2.99 per cent, plus a one per cent levy for social care.
The Chancellor Jeremy Hunt is understood to be considering hiking that amount in order to ease pressures on social care, with inflation standing at more than 10 per cent. The LGA warned that many services are facing “severe” cuts, and without guaranteed sufficient funding for next year and beyond, councils will be forced to cut vital services for vulnerable children and older people.
