Council Tax

Robert Neill Excerpts

Wednesday 21st March 2012 Written Statements

[The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)]

Today, my Department has published council tax figures for 2012-13 in England. It shows that thanks to the coalition Government’s council tax freeze initiative, the average change in band D bills will be just 0.3%—a significant real terms cut in council tax. The average band D bill will be £1,444 a year.

I am pleased to inform the House that the overwhelming majority (358 of 421) of eligible local, fire and rescue and police authorities in England have decided to freeze or reduce their band D council tax in 2012-13. The take-up rate was 90% among elected local councils. Participating local authorities will therefore be eligible to receive the additional grant offered by the Government for doing so.

Support for hard-working families and pensioners

This is good news for hard-working families and pensioners who previously experienced a doubling of council tax under the last Administration. This year, over 20 authorities have also cut council tax between 0.1% and 3.75%. Indeed, in London, all households will benefit from a cash terms cut in their bills.

As compared with the typical capping threshold under the last Government of a 5%) council tax rise, a freeze saves a typical household up to £72 in each of the two years of the council tax freeze schemes.

The Localism Act 2011 abolished central Government capping and instead gives local people the power to veto excessive council tax increases in a binding referendum. No authority has reported that it will be holding a referendum in 2012-13 by setting an excessive increase. The Localism Act measures will continue to ensure that local taxpayers are protected in future years.

Such action on keeping down council tax complements the measures already taken to help families—by stopping any council tax revaluation in this Parliament and by abolishing plans to impose bin taxes on family homes.

Council tax freeze grant

The Government set aside £675 million to help authorities in England freeze their council tax for a further year. A local authority that has done so will receive a grant equivalent to a 2.5% increase in its 2011-12 band D figure multiplied by the latest available tax base figure.

Police and single purpose fire and rescue authorities will receive a grant equivalent to a 3% increase. The City of London will receive a grant equivalent to a 2.75%) increase with slightly different arrangements applying to the Greater London Authority (based upon a combination of a 2.75%) and a 3% increase).

My Department will write to individual local authorities shortly informing them of the amount of freeze grant I propose to pay to them for meeting the terms of the new scheme for 2012-13. I intend that this one off grant will be paid in full in April 2012. All authorities which froze or reduced their council tax in 2011-12 will continue to receive a further grant in each year of the spending review.