Council Tax May Rise by 5% as Labour Maintains Cap

Labour has confirmed that the cap on council tax rises will remain at 5% next year, potentially increasing average family bills by £100.

Prime Minister Keir Starmer avoided confirming this during a question from Conservative leader Kemi Badenoch, but his press secretary later clarified that the cap remains unchanged.

This comes as inflation in October fell to 1.7%, the lowest since 2021.

Currently, average Band D council tax in England is set at £2,171 for 2024-25, marking a 5.1% rise from the previous year.

Households in the most expensive Band H face an increase, with last year's £4,342 bill going up by £217.

The rise could outpace inflation significantly.

Labour criticized the Conservatives for leaving local authorities financially strained.

Government figures show core spending power for local governments will rise from £64.7 billion in 2024-25 to £68.4 billion in 2025-26, but concerns remain over adequate funding.

Currently capped at 2.99%, an additional 2% increase is allowed for councils with social care duties without needing a referendum.

With 25% of councils at risk of needing emergency support to prevent bankruptcy, council tax increases seem probable.