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Council tax bills have gone up for millions of households in England and Wales.
Large increases set by local authorities came into force on 1 April. Many have also slashed services in an effort to balance their books.
How much is my council tax bill going up by?
Councils with social care duties can raise council tax every year by up to 4.99%, without triggering a referendum. Others can increase it by up to 2.99%.
The County Councils Network previously predicted that 75% of councils would introduce the maximum increase in April 2024.
Councils can increase bills by more than 5% without a referendum if they have government permission.
In Wales, a 12% council tax rise was approved for Pembrokeshire.
What is council tax and who pays it?
Council tax is a compulsory charge on properties in England, Scotland and Wales. It is set by local authorities to raise money for providing services.
Typically, anyone who is over 18 and owns or rents a home has to pay council tax.
However, there are some exemptions and discounts.
Properties occupied only by students are exempt.
Most people pay in 10 monthly instalments and then don’t pay anything in February and March.
How is council tax calculated?
How much you pay depends on the council tax band your property is in. The more expensive the property, the higher the band.
In England and Scotland, bands are based on the price the property would have sold for in 1991, and in Wales it is 2003. Northern Ireland’s system uses 2005 prices.
You can check which band your home is in:
Where does my council tax money go?
Council tax is a major source of income for most councils. It helps fund numerous services, including:
- rubbish collection
- street lighting
- libraries
- police and fire services
- youth clubs
- parks and recreation facilities
Council tax helps to fund local services such as playgrounds
Council tax bills also include additional charges – called levies – which pay for other services.
One goes towards the cost of care homes and other adult social care services. Another is set by local police and fire authorities to help fund their services.
Some cities with mayors, such as London and Manchester, can also add a separate levy that covers funding various services.
Where else do councils get their money?
Councils in England can raise some income by charging for services like parking, swimming pools, planning applications and from commercial investments.
Most of the rest comes from a mix of business rates and central government grants.
It says cuts in central government grants, rising inflation, higher energy costs and increases to the National Living Wage are all factors.
What happens when a council goes ‘bankrupt’?
This means they can’t commit to most new spending, and residents could see cuts to services, such as reducing the number of bin collections or dimming streetlights.
Before 2018, only two councils had issued a section 114. Since then, there have been more than 10 such notices
One in five English councils say that it is in danger of going bankrupt, according to the LGA.
A number of authorities in England have not issued section 114 notices but are receiving exceptional financial support to manage financial pressures.
Middlesbrough Council, for example, is one of 19 authorities that has permission to borrow money to fund day-to-day spending in 2024-25.
Birmingham City Council went bust in 2023, with a £760m black hole. It followed Woking Council, Thurrock and Croydon (for a third time).
What happens if you can’t pay your council tax?
Don’t just stop paying – councils may take legal action to reclaim the money.
You might be able to pay less council tax or not pay it at all depending on your circumstances.