For immediate release
A proposed council tax rise of 25 per cent would be the largest for two decades in England if it is approved by ministers, according to analysis of council tax data by the TaxPayers’ Alliance.
The inflation-busting hike, which has been requested by Windsor and Maidenhead council, would be the highest in percentage terms since 2005-06, when South Cambridgeshire council increased council tax by almost 33 per cent. As the proposed increase is above the referendum cap of 5 per cent, it would need to be approved by Angela Rayner, the Secretary of State for Housing, Communities and Local Government. The council claims this is necessary to avoid a Section 114 notice, an effective declaration of bankruptcy.
Since 1996-97, there have only been 70 incidents where a council has raised council tax by more than 25 per cent, with zero occurrences since 2005-06. There have been 530 occasions when councils have increased rates by 10 percentage points or more. The largest ever was Huntingdonshire council, which increased rates by almost 150 per cent in 1998-99. However Huntingdonshire is a district council meaning in nominal terms the increase was only from £20 per year to £49 per year. The largest ever increase by an upper-tier authority was Wandsworth, which increased rates by 57 per cent in 2003-04. The largest increase by an upper-tier authority outside of London was Leicester, which increased rates by 26 per cent in 1998-99.
The TaxPayers’ Alliance are also warning that if ministers accept the request it would lead to a dangerous precedent for other local authorities to try and follow. If all councils were to increase council tax by 25 per cent it would mean average Band D bills would soar to £2,742, adding £548 onto average household bills.
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Key findings:
- Windsor and Maidenhead’s proposed council tax increase, if approved, would be the largest since 2005-06, when South Cambridgeshire increased rates by 32.76 per cent.
- This proposed increase breaches the referendum cap, meaning that the tax rise would have to be approved by a local referendum if ministers don’t grant the council special dispensation to exceed the cap
- Since 1996-97 there have been 70 incidents of councils increasing council tax by more than 25 per cent. Of these, 65 were district councils, four were London boroughs and one was a unitary authority
- The largest ever council tax increase by percentage terms was Huntingdonshire council’s 149.7 per cent increase in 1998-99. In cash terms this was an increase from £20 per year to £49. The largest upper-tier council tax increase was Wandsworth council’s increase of 57.3 per cent in 2003-04
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If a 25 per cent increase was replicated across the board, it would mean average band D bills increasing by £548 to £2,742
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Elliot Keck, head of campaigns of the TaxPayers' Alliance, said:
"Taxpayers will be following Rayner’s decision with bated breath.
“Windsor and Maidenhead’s almost unprecedented request would cripple local residents and if replicated would cause chaos for household finances just as the growing tax burden is already tightening its vice-like grip.
“Angela Rayner should firmly reject this request and tell the town hall it needs to ask residents for permission if it wants approval for this eye-watering hike.”
TPA spokespeople are available for live and pre-recorded broadcast interviews via 07795 084 113 (no texts)
Media contact:
Elliot Keck
Head of Campaigns, TaxPayers' Alliance
[email protected]
24-hour media hotline: 07795 084 113 (no texts)
Notes to editors:
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Founded in 2004 by Matthew Elliott and Andrew Allum, the TaxPayers' Alliance (TPA) campaigns to reform taxes and public services, cut waste and speak up for British taxpayers. Find out more at www.taxpayersalliance.com.
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TaxPayers' Alliance's research council.
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All data was obtained from the council tax live tables. Data on percentage increases since 1996-97 by council was obtained from the sheet “ex_PP_(%)”, meaning parish precepts are excluded. Precepting authorities other than councils are also excluded from the analysis. Data on the impact of a 25 per cent increase across England was obtained from “area_CT_(%)”
- The TaxPayers’ Alliance is campaigning for a freeze on council tax rises.