Council tax disparity – a cause for concern?

March 29, 2018   By Dan Bates, pixelfinancial


Yesterday (28 March), the Government released Council Tax statistics for 2018/19. It won’t surprise you to know that the majority of local authorities have taken advantage of the additional percentage point increase, from 2% to 3%, in the Council Tax referendum limit. Three quarters of all authorities have increased the main part of their Council Tax by over 2.5% and with most upper tier authorities taking advantage of the Adult Social Care Precept flexibility, the average Council Tax bill in England in 2018/19 will have increased by 5.07%; an inflation busting uplift!

Council Tax is now, by some way, the main funding source for local government accounting for almost 60% of Spending Power in 2018/19. However, significant variances in both council taxbases and levels between individual Councils and types of authority is resulting in arguably unfair disparities in Spending Power.

So here is a summary of the statistics released today, starting with the level of increase by type of authority. The table below focusses on the main part of Council Tax and excludes the Adult Social Care precept.

Table 1

Only a small number of authorities, less than one in ten, increased Council Tax by less than 0.5%. Many more London Councils (10 of 33) had low increases with districts the next more likely (16 of 201) to have a small uplift. At the other end of the scale, 24 of 27 Counties increased Council Tax by at least 2.95% and the majority of Mets and Unitaries also opted for bigger increases. Larger increases in shire and metropolitan areas has further widened the gap in band D levels which is already significant, as the graph below shows.

Graph 2

The average band D Council Tax is highest in unitaries at £1,426 compared with the Inner London average of £971. The Met average is £1,380, Counties average is £1,291 (but this should be added to district average of £181) and Outer London average is £1,251. The highest individual authority band D at £1,688 is more than 4 times the lowest at £415.

Remember though that Council Tax levels are only half the story. The taxbase is just as important – the average Council Tax in an authority is not actually the band D but is dependent on the valuation bands that properties in the authority fall into. So an authority where the majority of properties are Bands A, B and C will receive significantly less Council Tax income than the Band D average might indicate. There are also other factors like Council Tax Support and other exemptions which determine how much income an authority will raise from Council Tax. Look at my previous article for a better explanation of this.

Such significant disparities, in tax levels and taxbases, must surely be a cause for concern given continuing spending pressures, particularly social care and the increased reliance on Council Tax to fund these pressures.

Dan works for the Pixel Funding Advisory Service which provides analysis and support on the local government funding system to more than 90 local authorities.

Dan can be contacted at or via on Twitter and on LinkedIn

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