Plans for a second year's Council Tax freeze set out
Communities Secretary announces details of financial help to help councils freeze bills in 2012 to 2013.
We know households are facing difficult times so we鈥檙e helping keep living costs down with a second year鈥檚 Council Tax freeze, Local Government Secretary Eric Pickles said today (14 November 2011), as new scheme details were published.
Estimates of the government grant boost that every council in England would receive if they commit to holding or reducing average band D Council Tax for a second year were published today.
This follows the announcement that government has set aside an extra 拢805 million, of which up to 拢675 million will be available to local authorities in England to help keep Council Tax down for a further year.
This new support builds on the 2011 to 2012 freeze offer taken up by all councils, boosting what they could get over 4 years to 拢3.3 billion if they hold Council Tax for a second year. The new scheme would mean that local taxpayers living in an average band D home in England could once again save up to 拢72 compared to a 5% rise in Council Tax, on top of this year鈥檚 Council Tax saving of up to 拢72.
The new voluntary scheme will be open to the same councils as last year. Councils that freeze or reduce their Council Tax next year will get a one-off grant equivalent to raising their Council Tax by 2.5%. Police and single-purpose fire and rescue authorities will get a 3% equivalent, with the Greater London Authority and the City of London getting intermediate offers.
Eric Pickles said:
鈥淟ast year every council signed up to our Council Tax freeze, but with many families still facing difficult times we鈥檙e rolling over our successful scheme so councils can keep a lid on bills for another year.
鈥淥ur 2-year freeze promise, potentially worth up to 拢72 each year to band D residents, is in stark contrast to the years before when Council Tax was allowed to double.
鈥淭oday every local authority can see how we鈥檒l back them to hold Council Tax steady for another year and leave millions of taxpayers with more of their hard-earned cash in their pockets.鈥�
Further information
Council Tax bills hit 拢1,439 on band D in England in 2010 to 2011. This year, 2011 to 2012, the average band D bill set by local authorities remained at 拢1,439. In London it was 拢1,308; in metropolitan areas it was 拢1,399; and in shire areas it was 拢1,484. Council Tax was 拢688 in 1997 to 1998. This means Council Tax has risen over 100%, or an extra 拢751 a year on a band D home. Since all other bands are set as a percentage of band D, homes in every band have seen their bills double.
The value of saving for taxpayers by area from 2 years of the Council Tax freeze scheme compared to a 5% rise is listed in this
To help local authorities with their budget planning, we have published an Grants will be finalised in March 2012 once authorities have reported the tax base underpinning their calculation of Council Tax for 2012 to 2013. A further 拢675 million will go to help local authorities in England freeze their Council Tax next year on top of this year鈥檚 freeze. Of this, the London offer of around 拢100 million is based on a 2.5% increase for borough councils, a combined percentage increase of 3% and 2.75% for the Greater London Authority and of 2.75% for the City of London.
The scheme for 2012 to 2013 will comprise a one-off payment of grant, which is payable for one year only. The Localism Bill proposes to give the public the right to veto excessive Council Tax rises. Councils that set Council Tax increase above a ceiling approved by Parliament each year would automatically trigger a referendum of all registered local electors in their area.
The scheme will be voluntary, and will apply separately to each billing and major precepting authority in England (including police and fire and rescue authorities) rather than to each Council Tax bill issued. Local precepting authorities, such as town and parish councils, will not be included in the scheme, but the Government urges them to exercise restraint and help make sure no Council Tax payer faces an increased bill. The Devolved Administrations will receive Barnett consequentials for this additional spending.
Assuming that all authorities take up the offer to freeze or reduce their Council Tax in 2012-13, we estimate Government will provide 拢3.3 billion of grant over the Spending Review period. You can view a breakdown of the funding for each area (Excel 87KB).
Average band D Council Tax and percentage change between 1993 to 1994 and 2011 to 2012 are shown below:
| Financial year | Average band D Council Tax bill | % increase on previous year |
|---|---|---|
| 1993 to 1994 | 拢568 | 听 |
| 1994 to 1995 | 拢580 | 2.1% |
| 1995 to 1996 | 拢609 | 5.0% |
| 1996 to 1997 | 拢646 | 6.1% |
| 1997 to 1998 | 拢688 | 6.5% |
| 1998 to 1999 | 拢747 | 8.6% |
| 1999 to 2000 | 拢798 | 6.8% |
| 2000 to 2001 | 拢847 | 6.1% |
| 2001 to 2002 | 拢901 | 6.4% |
| 2002 to 2003 | 拢976 | 8.2% |
| 2003 to 2004 | 拢1,102 | 12.9% |
| 2004 to 2005 | 拢1,167 | 5.9% |
| 2005 to 2006 | 拢1,214 | 4.1% |
| 2006 to 2007 | 拢1,268 | 4.5% |
| 2007 to 2008 | 拢1,321 | 4.2% |
| 2008 to 2009 | 拢1,373 | 3.9% |
| 2009 to 2010 | 拢1,414 | 3.0% |
| 2010 to 2011 | 拢1,439 | 1.8% |
| 2011 to 2012 | 拢1,439 | 0.0% |
| 2012 to 2013 | 拢1,444 | 0.3% |