Thank you for contacting me about council tax.
Local councils play a critical role in supporting communities and providing valuable services, especially when it comes to helping those most vulnerable. I am assured that the Government is committed to supporting local authorities to maintain and improve the services they provide, while protecting residents from excessive council tax increases.
Council tax is the main source of locally raised income for local authorities and helps to pay for local services. However, there is a referendum principle to help protect local taxpayers from excessive council tax increases, which was first introduced by Conservative governments.
House of Commons sets an annual threshold at which a council tax referendum is triggered. I believe that these provisions strike the right balance: they are not a cap, nor do they force councils to set taxes at the threshold level. Local authorities know their areas best and it is for them to determine the level of flexibility they use in setting council tax.
The referendum limit for increases in council tax will be set at three per cent per year as of April 2023. In addition, local authorities with social care responsibilities will be able to increase the adult social care precept by up to two per cent per year. This will give local authorities greater flexibility to set council tax levels based on the needs, resources and priorities of their area, including adult social care.
I realise that many people may be facing financial worries, which is why every council is required to have a council tax support scheme in place. These schemes help local residents struggling to pay their full council tax bill, reducing the financial burden for those in need.
The Government has put in place a new one-off funding guarantee to ensure that all local authorities see a minimum three per cent increase in their Core Spending Power in 2023-24 before taking any local decisions on council tax levels. The Government is also providing local authorities with their share of a
£100 million Council Tax Support Fund to allow them to deliver additional support to households in need.
More widely, the Government has stepped in to help families with other household bills. Support ranges from the Household Support Fund - which helps households who need it with the cost of essentials - to the Energy Price Guarantee which limits the amount you can be charged per unit of gas or electricity. The Chancellor has confirmed that the Government is maintaining the Energy Price Guarantee at £2,500 up to June 2023.
If you are facing financial difficulties, you may be eligible to apply for a reduction to your council tax online: https://www.gov.uk/apply-council-tax-reduction
Thank you again for taking the time to contact me.