Commons Library briefing on council tax increases

posted on 23 January 2017, updated on 23 January 2017

The Commons Library briefing paper, Referendums on Council Tax Increases in Local Authoritiespublished in December 2016, explains the system of referendums on council tax increases in local authorities and sets out the legislative framework and the thresholds that have been set in previous years.

From the 2012/13 financial year, local authorities, fire authorities and police and crime commissioners have been required to hold a referendum if they wish to increase council tax by more than a set percentage. This is fixed by the secretary of state each year; often it is set at 2% for most classes of authority.

Draft thresholds have been published for the 2017/18 financial year. These are:

  • county and unitary councils: 2%, plus an extra 3% to be spent on adult social care (the 'social care precept') 
  • district councils: 2% or £5 on a Band D bill, whichever is greater
  • police and crime commissioners (PCCs): 2% (those with council tax levels in the lowest quartile may raise council tax by up to £5 on a Band D bill without a referendum) 
  • fire and rescue authorities: 2% 
  • Greater London Authority: 2%.

As in previous years, no principles are to be applied to parish and town councils. 

Referendums must be organised by billing authorities and there is provision for recovery of expenses where the referendum is held on behalf of a precepting authority. Rules for the conduct of referendums have been set out in regulations.

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