Energy bills rebate: Average council tax bill will fall this year after Rishi Sunak stepped in to ease cost of living crisis
After Rishi Sunak announced the one-off energy bills rebate to ease the cost of living crisis, how much will you pay in council tax and how does that compare to the rest of the country?
Wednesday 30 March 2022 19:58, UK
The average household in England is expected to pay 拢53 less in council tax this year as a result of the government's 拢150 energy bills rebate.
The average council tax bill in 2022/23 will be £1,375, which is 3.7% less than the £1,428 paid last year, according to new government data.
The one-off energy bills rebate is available to most properties in Bands A-D, around four-fifths of homes in England. Without it, the average household would experience a 4.5% rise in council tax costs.
Use the table below to see how much council tax is in your area and how it compares to the average bill of £1,375.
Council tax bills have increased markedly over the past five to ten years, says Thomas Pope, deputy chief economist at the Institute for Government, a think tank.
"While the overall amount of money from council tax that councils have has risen, the quality of services has not really increased, in part due to cuts to central government funding," he says.
Over the past decade, social care has absorbed an increasing share of council budgets due to rising demand and costs. This has come at the expense of the other services, such as highway maintenance, rubbish collection and education support.
Where has council tax risen the most?
Councils have the power to choose how much to increase council tax each year, with different limits set by central government depending on the type of authority and whether it has control of services such as social care.
As a result, the change in rates varies a lot between councils. This year, Band D council tax for two people (commonly used as the average rate) increased by 5.2% in Sandwell in the West Midlands, the greatest rise of any English council. The smallest rise, in Southampton, was only 0.8%.
Where do people pay the most council tax?
The proportion of households benefiting from the rebate also varies considerably across the country.
In central London, many areas have lower than average rates but also fewer properties that will qualify for the £150 reduction - for example, it will apply to only a third of housing in Kensington and Chelsea.
Whereas in other metropolitan areas, which have far higher average council tax bills, almost all households are in Bands A-D. More than 90% of homes are eligible in Sunderland, Manchester and Liverpool.
Will this ease the cost of living crisis?
Rishi Sunak, the chancellor, introduced the rebate to help people with the surging cost of living. But with inflation expected to top 8% this year, far outstripping wage growth, a £53 cut in council tax will not go far.
Mr Pope says that the government has chosen to this approach because it wants to help people on all incomes.
"It provides some support to most people, but what it doesn't do is really focus it on the people who are least well off," he says. "If you really wanted to design a measure that was very well targeted towards people at the bottom then Universal Credit is by far the best way to do that."
This was something that the chancellor was criticised for not doing in his spring statement, but he has set aside £500m for councils to give to people struggling with the rising cost of living.
There are concerns about the fairness of the current council tax system. High levels of deprivation and low wage growth often means there is high demand for council services, necessitating higher tax rates.
Shaun Davies, chair of the Local Government Association's resources board, says the government needs to overhaul the current council funding model.
"Councils continue to face the tough choice about whether to increase council tax bills to bring in desperately-needed funding to provide services at a time when they are acutely aware of the significant burden that could place on some households," he says.
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