UK Prime Minister Rishi Sunak has criticized local councils in England for seeking permission to raise council taxes by more than 5% amid funding shortfalls. The government recently granted approval to several councils, including Thurrock, Woking, Slough, and Birmingham, to exceed the 5% cap.
However, Somerset’s request was denied as the council faces a £100 million budget deficit. Sunak emphasized the need for councils to manage the cost of living for residents while ensuring that excessive council tax increases do not unnecessarily burden people.
The funding crisis in local authorities has led to concerns about essential services, and the government recently announced a £600 million injection into local government funding.
The ongoing debate between local councils and the UK government over council tax increases has highlighted the challenges facing local authorities as they grapple with funding shortfalls. Prime Minister Rishi Sunak’s criticism of councils seeking permission to raise taxes by more than 5% underscores the delicate balance between addressing financial pressures and avoiding additional burdens on residents.
While several councils, including Thurrock, Woking, Slough, and Birmingham, received approval for tax increases, Somerset’s request was denied due to a significant budget deficit. The criticism, particularly aimed at Liberal Democrat-led Somerset council, reflects the government’s stance on managing finances without resorting to excessive tax rises.
Local councils in England have been dealing with a funding crisis, with a 40% reduction in grant funding from central government between 2010 and 2020. The financial strain has pushed some councils to declare themselves effectively bankrupt, issuing Section 114 notices. Michael Gove, the communities secretary, recently announced a £600 million injection into local government funding to prevent further crises.
However, members of the local government select committee have warned that a more substantial investment of £4 billion may be needed to avert an “out of control” financial crisis affecting crucial services like adult social care and child protection.
The central government’s expectations for councils to raise council tax by the maximum 4.99% in April have raised concerns among some Tory officials. They fear that such increases could counteract the impact of national tax cuts promised in the upcoming budget.
Prime Minister Sunak emphasized the importance of local councils being respectful of people’s family budgets and exercising restraint in implementing council tax rises. The ongoing discussions and decisions in this regard highlight the complexity of balancing local fiscal responsibility with the need to maintain essential services and support communities.
