The tax will be allowed to rise by up to 5% meaning an average of an extra £100
Council tax rises will help ensure local authorities are funded next year, a minister has said as he rejected Tory claims of a £2.4 billion “black hole”. Communities minister Matthew Pennycook said the Government expects an additional £1.8 billion to be raised through council tax in 2025/26, adding that business rates and funding connected to new homes will contribute £600 million.
This means the average band D council tax household faces an above-inflation increase amounting to more than £100 next year. Responding to an urgent question from the Conservatives, Mr Pennycook told the Commons: “Decisions on the council tax levels to set or whether to hold a referendum to go beyond the referendum principles sits with councils.
Mr Pennycook said the Conservatives created a “mess” in local government, adding: “That’s why at the Budget we announced over £4 billion in new local government funding, including an additional £1.3 billion in the local government finance settlement.” Ministers have said estimated core spending power for local government will increase from £64.7 billion in 2024/25 to £68.4 billion in 2025/26.
“That demonstrates that the Chancellor’s Budget has opened up a £2.4 billion black hole in council finances.”
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