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Six councils in and around London given the power to make bigger council tax increaseAfter the government reduced their share in funding.
Kensington and Chelsea, Westminster, Wandsworth, Hammersmith and Fulham, City Londonand Windsor and Maidenhead will all be allowed to raise council tax rates More than 5 percent for two years, without the need for a referendum of residents.
comes after this Government Funding shifted toward more deprived areas as part of an effort to create EnglandThe funding model is fair. But the Tories have accused the Government of wanting to “punish” councils with low taxes.
The six councils which have been given pre-authorisation to exceed the normal Council tax Each faces funding cuts due to a two-year limit, as well as having one of the lowest council tax rates in the country.
Minister for Local Government and Homelessness Alison McGovern He told the Commons on Wednesday that the exemption for these areas would “improve fairness, as taxpayers in those councils have the lowest bills in the country, and have paid up to £1,280 less than the average council taxpayer this year.”
He added: “This will enable the Government to more fairly allocate more than £250m of funding into the system, rather than subsidizing the bills for half a million households in those council areas.
“It will also provide greater flexibility to those officials in deciding how to manage their finances following our reforms.
“Councils will decide on the level of council tax increases and decide whether to use the relatively high alternative sources of income that many of them benefit from.”
But the Institute for Fiscal Studies (IFS) has estimated that Wandsworth and Westminster will need to increase council tax by up to 75 per cent to balance the accounts in light of the reforms.
As part of the government’s new multi-year funding deal, which sets out local government finances for three years to 2029, English councils will receive around £78 billion for essential services next year, with more money going to deprived areas.
According to the Ministry of Housing, Communities and Local Government (MHCLG), by the end of the multi-year settlement councils will see their core spending power increase by 23 per cent compared to 2024-25.
It can be used to pay for services such as bin collection, accommodation and children’s services.
An updated funding system will also be introduced, aiming to provide more funding for the areas most in need, with the most deprived 10 per cent of councils seeing a 24 per cent increase in per capita income.
The agreement also includes other changes, including allowing councils to keep all excess council tax from new homes to encourage local development and home ownership.
In a statement to MPs, Ms McGovern said councils “did not have the resources” to tackle deprivation in the first place.
“The austerity of the last decade and a half affected every community, but the worst impact was felt by people living in the most deprived areas, and that was a choice.
He said, “By breaking the link between funding and deprivation, the Tories penalized poor councils.”
But the Conservatives said the changes would “punish councils that keep council tax low” while “transferring money to badly run Labor councils that spend irresponsibly”.
Shadow local government secretary Sir James Cleverly said: “Inevitably, the councils that lose will be forced to cut services or raise taxes – and with the principles of the referendum being scrapped, these increases will be large.”