Council tax in England set to rise by up to 5%

Under current rules, councils in England providing social care services can increase tax rates by up to 5%, while others can increase rates by up to 3%.

Councils who want to increase bills above this level must get permission from the government or hold a referendum.

According to government figures, external, the average band D council tax set by local authorities in England for 2024-25 was £2,171 – an increase of £106 or 5.1% on the previous year.

On Wednesday, the prime minister’s press secretary told reporters the 5% threshold set by the previous government “remains the same”.

It came after Conservative leader Kemi Badenoch pressed Sir Keir Starmer during Prime Minister’s Questions over whether the cap would be kept in place, with the PM sidestepping the question.

Answering an urgent question on the issue in the House of Commons on Thursday, Pennycook defended the decision to keep the cap.

The minister said the government was committed to protecting the most vulnerable through the 25% discount on council tax for people who live alone and other support schemes.

He added that this means more than eight million households do not pay a full council tax bill.

Pete Marland, from the Local Government Association (LGA), said the “significant financial pressures” facing local services could not be met by council tax income alone.

“It also raises different amounts in different parts of the country – unrelated to need – and adds to the financial pressures facing households,” he said.

“We need a significant change in our funding to stabilise local government finances so we can deliver the services local people want to see.”