Analysis shows nine in 10 areas facing maximum council tax rise in England

A vast majority of councils have signalled they will apply a maximum council tax increase of at least 4.99% this year, it has emerged.

Figures for the 139 top-tier authorities in England that have proposed or confirmed increases so far show 85% are planning a rise just short of 5% – the threshold that would trigger a local referendum in normal circumstances.

When the six councils in acute financial stress that were granted permission to increase council tax beyond this level without a local vote are included, the proportion increases to nearly 90%.

Of the councils which have disclosed plans, 122 are proposals awaiting approval from full council and 17 have been confirmed, leaving 14 yet to declare their intentions, analysis by the PA news agency shows.

Based on trends in recent years, it is unlikely that a council tax rise proposed by senior councillors will be rejected by full council at this late stage of the budget process.

Just 15 councils are planning increases below 4.99%, with levels ranging from 4.98% in Barnet, north London, and Warrington, Cheshire, to 2.00% in Wandsworth, south London.

Only six other councils are planning to increase council tax by 4% or less.

These are Kensington & Chelsea in London (4.00%), Doncaster in South Yorkshire (3.99%), North East Lincolnshire (3.98%), Essex (3.75%), Rotherham in South Yorkshire (3.00%), and Lincolnshire (2.99%).

All upper-tier councils in the East Midlands, eastern England, the North East and the South West have proposed or confirmed their council tax increases.

In the East Midlands eight of the region’s ten councils have opted for the maximum rise, while nine out of 10 have hit this threshold in eastern England.

Meanwhile, only two councils in the North East, South Tyneside and Stockton-on-Tees, plan increases below 4.99%, both opting for 4.95%.

All 15 councils in the South West have announced their plans.

Torbay (4.75%) and Wiltshire (4.50%) are the only authorities opting for increases below 4.99%.

Somerset has been granted permission to increase council tax by 7.50%.

Of the 33 London councils, including the City of London, six are yet to disclose their council tax plans.

In the capital,  23 of the 27 councils that have declared their intention opted for a 4.99% rise, with Kensington & Chelsea (4.00%) and Barnet (4.98%) joining Wandsworth as the exceptions.

The Government has granted Newham permission to increase council tax by 8.99%.

Among councils in the North West, 19 of the 21 that have confirmed plans decided on a 4.99% rise.

Warrington chose a 4.98% increase and Trafford in Greater Manchester has been granted permission for a rise of 7.49%.

In the South East, 16 of the 20 councils are planning a 4.99% increase and one, Windsor & Maidenhead, in Berkshire, has been cleared to increase beyond the cap to 8.99%.

Apart from Birmingham, which has been given permission to raise council tax by 7.49%, all 13 upper-tier councils in the West Midlands which have disclosed their plans opted for a 4.99% increase.

Three of the 15 councils in the Yorkshire & Humber region have set council tax increases at less than 4%: Rotherham has set a 3.00% rise, North East Lincolnshire 3.98% and Doncaster 3.99%.

The Government’s figure of a 6.8% overall increase in councils’ spending power in 2026-26 assumed all councils would increase council tax to 4.99%.

Wandsworth’s increase of 2.00% represents the third year in a row that council tax has been frozen in the borough, which is said to have the lowest council tax in the country.

Council leader Simon Hogg said: “Sound financial management is at the heart of everything we do.

“Wandsworth has one of the lowest levels of debt and some of the highest financial reserves in London, allowing us to freeze the main element of council tax and invest in what matters most to you – cleaner streets, safer neighbourhoods and a stronger community.”

Confirming what is currently the second lowest proposed increase in council tax in England of 2.99%, Lincolnshire leader Martin Hill questioned why some councils are permitted to raise council tax beyond the referendum threshold.

He said: “We do feel there is an element of penalising success and rewarding failure.

“We have always done the right thing at the county council. We have lived within our budget, kept our council tax low and it is a bit frustrating that other councils can’t seem to manage to do that at the same time we live within our means.”

He said the council had found nearly £400 million in savings since 2010 and would continue to look for further efficiencies.

New analysis has found that the poorest households are paying an increasing proportion of their income on council tax.

The Resolution Foundation said the poorest fifth of households across the UK paid 4.8% of their income on council tax in 2020-21, up from 2.9% in 2002-3.

The think tank identified that this share of income was three times more than the 1.5% spent by the richest fifth.

The council tax system has been described as flawed by experts, particularly as council tax rates in England and Scotland are based on the value of properties in 1991.

Lalitha Try, an economist at the Resolution Foundation, said: “This terribly designed tax increasingly resembles the very thing it was meant to replace – the dreaded poll tax.”

A Ministry of Housing, Communities and Local Government spokesperson said: “While councils are ultimately responsible for setting their own council tax levels, we are clear that they should put taxpayers first and carefully consider the impact of their decisions.

“That’s why we are maintaining a referendum threshold on council tax rises, so taxpayers can have the final say and be protected from excessive increases.

“Alongside this, we have taken a stricter approach than the previous government by only agreeing to a limited number of higher tax rises for councils in desperate need, so we can keep taxes on working people as low as possible.”