Average council tax bills in the UK are projected to reach £3,000 per year within five years, according to an analysis by the Conservative Party based on official figures released alongside the Budget. This projected increase, which could amount to an additional £600 for a typical Band D household, is set to elevate annual council tax receipts from an estimated £54 billion in 2026-27 to £70 billion by 2031-32.
Conservative housing spokesman Katie Lam criticized the projected rise, stating that a £100 council tax rebate announced by Labour would be insufficient to offset the significant increase. The Tories argue that this situation contradicts Prime Minister Andy Burnham's commitment to provide 'breathing space' for families struggling with the cost of living. Lam described the rebate as a 'meagre offering' and accused the Labour government of a 'classic example of giving with one hand while taking with the other.'
The Office for Budget Responsibility (OBR) forecast, which underpins these projections, assumes average council tax bills will rise by 4.4% and 4.3% in the coming years. The OBR noted that council tax receipts are expected to increase due to rising rates in England, Scotland, and Wales, as well as growth in the number of households.
The TaxPayers' Alliance chief executive John O'Connell commented that families will find the hike in their largest cost of living tax difficult to manage. A spokesperson for the Ministry of Housing, Communities and Local Government stated that decisions on council tax increases are made annually by local authorities, emphasizing that they expect these authorities to prioritize taxpayers. The projected increase could be even higher if councils implement rises exceeding the OBR's assumptions, as bills can increase by up to 5% annually without requiring a local referendum.