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Families could face ‘council tax rise of up to £100 a year’

<p>Families could reportedly face council tax hikes of up to £100 a year</p> (PA)

Families could reportedly face council tax hikes of up to £100 a year

(PA)

Council tax bills could rise by £100 a month from April after local councils were given powers to increase rates without consultation.

Office for Budget Responsibility (OBR) said in a report that local authorities would increase taxes by £1.8 billion next month after the Government allowed them to impose increases of up to 5 per cent.

This could result in an increase of £7.5 billion by 2025-26, the Telegraph reports.

A referendum is usually required if councils propose raising the tax by 2 per cent or more.

But in November’s spending review the Government gave councils the ability to put up their bills by up to 5 per cent to meet the increasing costs of social care, while police authorities can add a further £15 to their share of the levy.

The OBR estimates that around two-thirds of councils will raise taxes up to the new maximum of 4.99 per cent.

“This is more than explained by the Government’s decision to allow councils to increase council tax rates by up to 5 per cent … rather than the 2 per cent our March 2020 forecast assumed,” said the OBR in its Budget day report.

Last month communities minister Robert Jenrick “reluctantly” accepted a request from Mayor Sadiq Khan to allow a council tax rise in London of nearly 10 per cent.

Speaking at the time, Labour’s shadow communities secretary Steve Reed said the Government had chosen to “clobber” hard-working families with a council tax hike after the “Government’s own incompetence left the country facing the worst crisis of any major economy”.

He said: “Household budgets are under pressure like never before, millions of people are fearful for their job security, millions have seen their incomes plunge, millions more families are using foodbanks or going into debt just to survive.

“Now thanks to this Government, families are being forced to pay the price for Conservative failure with a council tax hike made in Downing Street.”

Local authorities can increase council tax bills by up to 5 per centPA
Local authorities can increase council tax bills by up to 5 per centPA

In January Mr Khan revealed plans to increase average B and D bills by £31.59 a year from April, with £15 of the increase being used to safeguard free travel for under 18s and Londoners over 60.

Another £15 would be spent on policing and the remainder of £1.59 will go to the London fire brigade to help implement post-Grenfell improvements.

It means that many London households face a total hike of £100 or more once their local borough council increase – likely to be five per cent - is included.

The Evening Standard has contacted the OBR for further comment.

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