Almost all English local authorities 'plan council tax hikes to avoid financial disaster'

The survey found 80 per cent of councils are concerned about their financial stability (PA)
Tom Powell8 February 2018

Almost all local authorities in England are set to raise council tax and charges amid concerns over their financial stability, a survey suggests.

Council tax is set to be increased by 95 per cent of councils, while 93 per cent will hike charges, according to the 2018 State of Local Government Finance research.

The planned increases come as 80 per cent of councils fear for their financial strength.

Surrey, Britain's richest county, is among the worst hit in the country and faces a £105m funding gap, the equivalent to a 12.8 per cent increase.

A Surrey County Council spokesman said: "We've agreed a three-year budget despite the severe financial pressure we - and councils across the country - are under due to rising demand for our services and falling government funding.

"We've been successfully managing the growing need for adult social care, children's and other key services partly through making savings of £540m since 2010 and have made sure we keep within our overall budget."

Council tax can be hiked by up to 3 per cent this year, in line with inflation, before a referendum is triggered, while authorities can also levy an additional "precept" to raise money for spending on social care.

The greatest immediate pressure on budgets came in children's services (nearly 32 per cent of councils), followed by adult social care (nearly 28 per cent), and housing and homelessness (19 per cent).

Adult social care was the greatest long-term pressure (nearly 38 per cent), the survey said.

Jonathan Carr-West, chief executive of the Local Government Information Unit, said the figures offered few surprises.

He said: "Councils are on the edge. They are for the most part holding services together (though a significant minority are not). But they can only do this this by raising council tax, increasing charging and draining their reserves.

"The system is unsustainable and needs far more fundamental reform than is presently on offer. It's simply not acceptable that we don't know how local government will work post 2020.

"Councils are calling for assurances around funding for the next three years and for a fundamental redesign of the finance system. At present government is offering neither. That has to change."

Responding, Local Government Association chairman Lord Porter said: "Some councils continue to be pushed perilously close to the financial edge.

"Many will have to make tough decisions about which services have to be scaled back or stopped altogether to plug funding gaps.

"Extra council tax raising powers will helpfully give some councils the option to raise some extra income but will not bring in enough to completely ease the financial pressure they face.

"This means many councils face having to ask residents to pay more council tax while offering fewer services as a result.

"The LGA has warned about the urgent need to address the £2 billion funding gap facing children's services.

"A child is being referred to council children's services every 49 seconds on a daily basis and councils started more than 500 child protection investigations every day last year - up from 200 a decade ago.

"This unprecedented surge in demand shows no sign of abating."

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