Council tax intake could soar 43% by 2030 – ‘adding £500 to the average bill’

Council tax intake could soar by 43 per cent by 2030, new government forecasts revealed by the Treasury show.

Local authorities took £41.2bn from council tax in 2024/2025, but it is estimated this will soar by £17bn to £58.8bn by 2030/31.

The five-year forecast of council tax receipts was provided by the government to the independent financial watchdog, the Office for Budget Responsibility.

The figures are not usually published, and were only released in response to a parliamentary question asked by the shadow secretary of state for local government, Sir James Cleverly, who accused Labour of having “baked in” the tax rises.

Based on the annual forecasts, the Conservatives estimate an average of £556 could be added to a council tax bill of a band D home by 2031.

The prime minister has warned about the ‘big decisions’ his government must take (PA)

Andy Burnham has previously warned of “big decisions” ahead for his administration regarding council tax, but Labour has denied plans for a £17bn council tax raid.

Mr Burnham has previously said he has been “persuaded” of the argument for reforming the system, but Downing Street said earlier this week that suggestions the prime minister is actively considering scrapping council tax or stamp duty are “not true”.

However, Sir James has warned that Mr Burnham’s devolution plans, to give more power over spending to regional mayors, could push bills even higher.

“Andy Burnham is right to want to boost growth across our communities. But his model of Manchesterism is a recipe for soaring taxes in every post code,” he said.

“Labour have already baked in £18bn of council tax rises. And now former Manchester mayor Burnham wants to go further and impose his high-tax regional model across England.

The Treasury figures were released in response to a parliamentary question asked by James Cleverly (PA)

“This is no solution to the problems facing our country. The Conservatives are the only party that will stand up for local democracy and keep taxes down.”

Mr Burnham has announced that English mayors will be allowed to keep a share of the income tax and business rates collected in their area.

The prime minister said by letting mayors keep a slice of income tax and business rates, he will “make good” on his pledge to “take power out of Westminster and carry it into every postcode in the country”.

The rate of income tax billpayers face will not change as a result of the reforms, and ministers will retain an equalisation system, so areas where less tax is collected continue to receive financial support.

Several parts of England have a mayor, including Greater Manchester, the Liverpool City Region, Cambridgeshire and South Yorkshire. Voters in other parts of the country will elect mayors for the first time over the coming years, including in Greater Essex and Hampshire and the Solent.

Louise Haigh called the Tory claims ‘nonsense’ on Friday (PA Wire)

First secretary of state Louise Haigh called the Tory claims “nonsense” on Friday, adding it is “completely wrong to suggest that councils have drawn up ... such plans”.

“Clearly, tax measures will be one for the budget, but there have been no plans .... as set out by councils,” she told LBC.

A Ministry of Housing, Local Government and Communities spokesperson said: “Councils have not yet set tax rates beyond this year, and it’s inaccurate to suggest so.

“Individual councils decide the level of council tax in their areas, taking into consideration a range of local factors, but we expect them to fully take into account the impact on taxpayers.”