Council tax freeze 'hits services'

PA/AOL Money
Council tax freeze 'hits services'
Council tax freeze 'hits services'

Stretched public services such as social care are missing out on billions in potential funding as a result of council tax freezes, research has found.

Average band D bills across England are set to increase by 1%, around £16, in the new financial year, according to the Chartered Institute of Public Finance and Accountancy (Cipfa).

But while the move may be good for household finances, under-strain public services could have benefited from an extra £2.8 billion in funding over 2015-16, its analysis found.

Increasing the tax in line with inflation since the Coalition took power would have put bills up by £168 - generating enough to fund the entire road maintenance budget for the United Kingdom or England's public health budget for the last year.

The coalition has tried to keep council tax down in two main ways - by offering financial top-ups to authorities who pledge freezes, and by insisting local referendums are held on increases above 2%.

Council tax for an average band D property is set to rise from £1,467.94 to £1,483.92 from April.

Rob Whiteman, chief executive at Cipfa, said: "Although it is welcome news that action by the Government has seen households saving money on council tax, it is also important to look at the cost of this.

"This data shows that if council tax had risen in line with inflation over the past few years there would now be additional funding available for areas in which it is critically needed, such as adult social care, which in turn would relieve some of the pressure on the NHS.

"Cipfa believes that we urgently need a debate on our council tax system and more broadly the way we fund local services. We must candidly address whether enforcing a virtual freeze on council tax over an entire parliament is sustainable and what the Government and local authorities can do to update it to better fund crucial public services."

Local Government Secretary Eric Pickles said: "Under the last administration, council tax bills more than doubled, pushing the typical bill to £120 a month from hard-working people and pensioners.

"Council tax became a big worry for those trying to balance family budgets. This Government has given families greater financial security by taking decisive action to keep council tax down, cutting bills in real terms.

"I welcome the news that so many councils have signed up to the council tax freeze this year, and it speaks volumes that only one local authority wants to take a council tax hike to taxpayers in a local referendum."

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