survey shows clear council tax divide between London and the rest of England

03-03-2014

The Chartered Institute of Public Finance and Accountancy’s (CIPFA) annual council tax survey has shown a clear divide opening up between London and the rest of England, with London councils having lowered their council tax this year while most of the rest of England has seen an increase.

Councils in Greater London have reduced their council tax this year by 0.4% or £5.39 on average, while authorities across the rest of England have raised it by around 0.8% or £11.35.

The survey also shows a small increase in the number of councils refusing the council tax freeze grant, with 43% of councils in England foregoing the 1% freeze grant offered by the Department of Communities and Local Government and raising council tax for 2014/15. This is up from the 41% of authorities who did not take up the grant last year and the 15% who turned it down in 2012/13.

Based on the survey, amongst those authorities foregoing the grant, council tax increases are likely to average 1.1% or around £16 for a Band D property. Since 57% of councils across England will take the freeze grant, the overall average Band D Council Tax bill looks set to rise by 0.6%, the equivalent of £8.47.

Outside of London the survey shows that the largest increases in England are in the South East, with authorities in the region raising a Band D council tax bill by 1.1% on average, the equivalent of £15.68. In contrast the East of England has effectively frozen council tax with a small 10 pence drop across the region. If you exclude London, the number of councils refusing the council tax freeze grant rises to 47%.

Rob Whiteman, CIPFA’s Chief Executive, commented,

“Local Authorities make council tax decisions based on local priorities. As the pressure from this period of unprecedented austerity has intensified, all councils are having to make increasingly difficult decisions to balance protecting hard-pressed taxpayers and maintaining local services.

“Though some London authorities have repeatedly decreased their council tax demands in recent years, the clear divide between the whole of London and the rest of the country this year does seem to reflect the priorities of London authorities, perhaps not surprisingly in the run up to local elections”

ENDS

Contact: Matt Patterson

CIPFA Press Office

t: 020 7543 5787

matthew.patterson@cipfa.org

Notes to Editors:

1. CIPFA spokespeople are available tomorrow morning (Tuesday 4 March) for comment or interview. Please contact the CIPFA press office if you would like to place a bid.

2. The survey results, upon which this release is based, will be updated regularly on the CIPFA stats website. The site also contains further information to assist in understanding the council tax change: www.cipfastats.net.

3. The full regional results are here:

GROSSED DATA Average Band D Equivalent 
Based on 59% Billing response (including Parish / Community)
58% of billing responders confirmed Percentage Total
Based on 98% Precepting response Increase / Increase /
93% of precepting responders confirmed 2013/14 2014/15 (Decrease) (Decrease)
£   p   £   p   £   p  
Inner London    1,098.53     1,094.23         (0.4%)          (4.30)
Outer London    1,428.23     1,422.88         (0.4%)          (5.35)
Greater London    1,301.81     1,296.42         (0.4%)          (5.39)
Metropolitan Districts    1,420.63     1,431.76          0.8%          11.13 
Unitary Authorities    1,485.76     1,499.51          0.9%          13.75 
Other Non-Metropolitan Authorities    1,509.83     1,520.10          0.7%          10.27 
England (excluding London)    1,485.00     1,496.35          0.8%          11.35 
All England    1,455.62     1,464.09          0.6%            8.47 
South East (excluding London)    1,489.76     1,505.44          1.1%          15.68 
Greater London    1,301.81     1,296.42         (0.4%)          (5.39)
East of England    1,501.43     1,501.33         (0.0%)          (0.10)
East Midlands    1,503.54     1,516.47          0.9%          12.93 
North East    1,535.20     1,549.10          0.9%          13.90 
North West    1,492.92     1,504.24          0.8%          11.32 
South West    1,513.38     1,525.91          0.8%          12.53 
West Midlands    1,429.35     1,440.50          0.8%          11.15 
Yorkshire & the Humber    1,427.32     1,440.55          0.9%          13.23 
Authorities in England that are not taking the freeze grant    1,489.20     1,505.23          1.1%          16.03 

4. On 26 June 2013 the Chancellor of the Exchequer announced that the Government will again provide additional grant funding to support councils that freeze Council Tax in both 2014/15 and 2015/16. Over £550 million will be made available through the scheme to local authorities who decide to freeze or reduce their Council Tax in 2014/15. If they do, councils, police and fire authorities will receive funding equivalent to raising their 2013/14 Council Tax by 1%.

5. For the 2014/15 financial year, all local authorities, Police and Crime Commissioners and fire and rescue authorities cannot raise council tax by more than 2% without a referendum

6. The average council tax demand on a “band D” property comprises three basic elements:

Local demands of the billing authority; Major precepts (e.g. County Councils, Greater London Authority and Police & Fire Authorities); Parish Council precepts.

7. These analyses are based on responses received from 59 per cent of billing authorities in England and 98 per cent of precepting authorities.  When all councils have set their budgets, the final outcome is not expected to change significantly.

8. Rounding errors, which sum to no more than one unit, may occur in the tables.

9. Full survey results will be available at the end of March.  For advance copies telephone: 0203 117 1840 and ask for “Council Tax Demands & Precepts Statistics 2014/15”. Spreadsheet price £375.00 (+ VAT).

About CIPFA

CIPFA, the Chartered Institute of Public Finance and Accountancy, is the professional body for people in public finance. Our 14,000 members work throughout the public services, in national audit agencies, in major accountancy firms, and in other bodies where public money needs to be effectively and efficiently managed. As the world’s only professional accountancy body to specialise in public services, CIPFA’s portfolio of qualifications are the foundation for a career in public finance. They include the benchmark professional qualification for public sector accountants as well as a postgraduate diploma for people already working in leadership positions. They are taught by our in-house CIPFA Education and Training Centre as well as other places of learning around the world. We also champion high performance in public services, translating our experience and insight into clear advice and practical services. They include information and guidance, courses and conferences, property and asset management solutions, consultancy and interim people for a range of public sector clients. Globally, CIPFA shows the way in public finance by standing up for sound public financial management and good governance. We work with donors, partner governments, accountancy bodies and the public sector around the world to advance public finance and support better public services.