The telegraph

Councilors raise £ 7.5 billion for stealth tax robberies after Rishi Sunak eased local voting thresholds

According to an analysis by the Bureau of Budgetary Responsibility, households face a £ 7.5 billion tax collection after local authorities raise tax rates without consulting them. The OBR said councils would raise taxes by £ 1.8 billion next month – up to £ 100 a year for many households – after the government allowed them to increase taxes of up to 5 percent. This could translate into an increase of £ 7.5 billion by 2025/26. Councils usually cannot raise local taxes by more than 2 percent without a referendum. But the Chancellor raised the limit to 5 percent in his November review to cover councils’ rising social security costs. The OBR estimates that two-thirds of councils will raise taxes to a maximum of 4.99 percent, which is an increase of between £ 50 and £ 100 for Band D properties. The OBR said the Chancellor’s decision forced her to revise her estimate of the £ 800 million increase in council tax to £ 1.8 billion for the 2021-22 period. “This is more than explained by the government’s decision to allow councils to raise councils’ tax rates by up to 5 percent … instead of the 2 percent our March 2020 forecast assumed,” the OBR said in their report on budget day. This brings the Council’s tax burden to £ 39.9 billion in 2021/22 and to £ 45.6 billion in 2025/26. Local tax fighters said it was a “stealth” tax that would undermine Boris Johnson’s level-up agenda, while senior Tories, tax experts and council leaders blamed the government’s failure to resolve the welfare crisis for the increased bills. Andrew Dixon, founder of the Fairer Share Campaign for Property Tax Reform, said, “This … will only exacerbate the injustice of the current system where modest homes in the north often pay significantly more than mansions in Knightsbridge. It is certain that voters will feel uncomfortable when they are inspired by the Conservative speech about fairness and level advancement. The council tax was the elephant in the room when the chancellor delivered the budget. “While he was setting up support packages for those worst affected by Covid-19, there was no such respite for millions of humble and low-income households facing crippling tax burdens.” Stuart Adam of the Institute for Fiscal Studies said, “This will allow councils to spend more on welfare in the short term, while the government will work out some more fundamental solutions to long-term welfare funding. It was one of the things the household kept silent about. “Lord Lilley, a former social security secretary who will be releasing his own draft social reform next week, said:” With the government unable to decide how to reform welfare funding, the council’s taxpayers have taken the burden. “The councils’ care budgets have been cut to the limit. The proportion of people over 85 living in nursing homes has shrunk from 25 percent to 15 percent and can’t be much lower. “The Local Government Association said,” The councilors face the difficult decision of whether to increase the bills to provide much-needed funds to protect our services when we understand the significant burden that could put on some households. “Council tax increases – especially the adult welfare requirement – have never been the solution to the long-term pressures that councils face, particularly in welfare, which is in dire need of reform. “Further action is urgently needed to provide immediate support to the frontline social care services during the pandemic and to secure the long-term future of care and support. “The government urgently needs to come up with its proposals.” “Crippling” Bills About a quarter of Welfare Councils will issue a Band D home tax certificate for more than £ 2,000 for the first time in April. And in more than two-thirds of the territories, the bills for a Band D house will increase by at least £ 50. In London, households will be hit by a 9.5 percent increase in the Greater London Authority’s rate of council tax – an additional £ 31.59 for a Band D house. The combined increases mean that Band D bills are expected to increase by more than £ 100 this year in around seven of London’s 32 boroughs. A spokesman for the Department of Housing, Communities and Local Government said: “We have pledged over £ 35 billion to help local authorities support their communities and local businesses during the pandemic. “We’re also making new grants of £ 670 million available to councils to help them further reduce councils’ tax burdens for the next year on those least able to pay, including households hardest hit by the pandemic. “The councils were and are responsible for setting the councils’ tax rates. We set referendum principles to ensure that the local people have the final say on excessive increases. “