Majority of Local Authorities Set to Raise Taxes by Near Maximum Allowed Without Referendum

The vast majority of councils in England are planning to impose a near-maximum increase in council tax this year, with most opting for a 4.99 per cent rise. Data from 139 top-tier local authorities indicate that nearly 90 per cent will apply this increase, while a handful have been permitted to exceed the usual cap due to severe financial challenges.

Among those facing steeper increases, Somerset has been authorised to raise council tax by 7.5 per cent, while Birmingham and Trafford have received approval for 7.49 per cent. Newham and Windsor & Maidenhead stand out with planned hikes of 8.99 per cent.

Only 15 councils have proposed smaller increases, with Wandsworth at the lowest rate of 2 per cent, maintaining its position as one of the least expensive areas for council tax in the country. Other councils opting for more modest rises include Rotherham (3 per cent), Essex (3.75 per cent), and Doncaster (3.99 per cent).

Despite the widespread increases, experts and local leaders have raised concerns over the fairness of the council tax system. Martin Hill, leader of Lincolnshire County Council, which proposed a 2.99 per cent rise, criticised the disparity in tax-setting rules, saying: “We have always managed our finances responsibly, yet some councils receive permission to raise taxes beyond the threshold while we continue to operate within our means.”

The government’s financial projections assumed that all councils would raise tax by 4.99 per cent, contributing to an estimated 6.8 per cent overall increase in council spending power for 2025-26. However, some critics argue that the poorest households bear a disproportionate burden.

Analysis from the Resolution Foundation reveals that the lowest-income households now spend an increasing share of their income on council tax—4.8 per cent in 2020-21 compared to 2.9 per cent in 2002-03. This is significantly higher than the 1.5 per cent paid by the wealthiest fifth of households.

The current council tax framework, based on outdated property valuations from 1991, has long been criticised for being inefficient and unfair. Lalitha Try, an economist at the Resolution Foundation, described the tax as “flawed” and argued that it increasingly resembles the poll tax it was designed to replace.

As councils finalise their budgets, the impact of these tax increases on households and local economies remains a pressing concern, with many calling for urgent reforms to the system.