Louise Gittins, chair of the Local Government Association, is responding to leaders’ call for council tax to increase yet. It’s on track to reach 5% per year. This welcome increase will mostly go towards funding local services – like policing – as protests continue over the government’s recent Spending Review. The Local Government Association is the national voice of local councils, working to support councils to help them keep their communities healthy and vibrant.
Gittins pointed to some encouraging trends to the Spending Review. Among her commendations were support for child care services, increasing affordable housing, and investment in all modes of transportation. Together, these areas represent a strong and much-needed commitment to investing in community resources. She stressed the point that councils can increase their council tax by 5% annually without having to ask central government for permission. It’s likely that most councils won’t go as far as to implement this maximum increase.
The Chancellor, Rachel Reeves, confirmed that the 5% limit on council tax increases still stands from old government rules. She stated, “It is a cap, councils don’t have to increase council tax by 5%.” Reeves provided more details on what the state’s financial strategy might look like. It does not stop there; however, it assumes an additional average of 2.3% annual real growth in “police spending power.” This assumption is used to drive the development of local financial plans.
Even with the money provided in these councils’ ability to raise more council tax, many councils are still in dire financial straits. Gittins noted, “Many will continue to have to increase council tax bills to try and protect services but still need to make further cutbacks.” This proclamation highlights the terrible catch-22 and tightrope walk that cities are forced to walk these days.
Tiff Lynch, acting chair of the Police Federation for England and Wales, voiced concerns regarding ongoing austerity measures impacting local policing budgets. As Lynch wrote, this Spending Review needs to be the turning point. After 15 years of austerity, policing and police officers are shattered. Instead, these cuts will only persist and it’ll be the public who pays the price. His comments in today’s FT reveal a deeper panic – panic at the prospect of these budget cuts starting to hit frontline services.
In fact, Treasury documents indicate that future funding will consist of anticipated outlays from all revenue streams. To be fair, this does include the estimated funding from the police council tax precepts. This funding strategy paints a picture of the dependence on council tax rises to protect vital local services.
For the Ministry of Housing, Communities and Local Government, that means a 1.4% cut to its day to day budget in real terms. This extreme budget cut raises serious questions about the long‐term sustainability of important local services. As councils brace themselves for more council tax increases to support these vital services, the future is far from certain.