Council tax rise of 5% very likely, leader says

A council tax rise of 5% next year is very likely in Coventry, the leader of the city’s local authority has said.

George Duggins told the BBC the council was planning next year’s budget on the basis that such a rise will be the maximum available.

It comes after the government confirmed it was keeping the cap on how much local authorities can increase council tax at the 5% level.

Councils can raise the tax rate by more than this, but to do so would trigger a public vote on such a hike.

Councils across the UK have been facing significant financial challenges in recent years, with some, including Birmingham, going effectively bankrupt.

In Coventry, the authority has been among those slashing its spending to offset the rising cost of services, particularly social care and temporary accommodation.

The Labour-run council needs to find further savings of £10m this year if it is to balance its budget.

Duggins said it had been helped by the chancellor’s Budget, which included an additional £1.3bn for local government, in 2025-26.

“We’re hopeful we’re going to be in a better position than we've previously been,” he said.

But when asked to rule out a maximum council tax increase of 4.99%, he said: “I think it’s very likely that we will be working on that assumption.

“The government has made it very clear that they are working on the assumption that authorities will raise council tax by 4.99%.

“We are planning on that basis.”

On Wednesday, the prime minister’s spokeswoman said the threshold for council tax “remains the same”.

The threshold for a vote, or referendum, stands at 5% for councils with social care responsibilities and 3% for those without.

Duggins has defended the council’s decision to hire two new directors, both on salaries of up to £130,000.

The local Conservatives accused the authority of hiring “luxury leadership”, at a time when it is considering further cuts to public services.

But Duggins said the new roles would “add to the strength of the council”.

“We believe this strengthens us or we would not agree to these posts,” he said. “I would not agree to these posts.”

The directors will focus on cutting spending and communicating better with residents.

Duggins added: “I’ve been getting my message across and of course we want to get the message across as to what the council does so people understand that.”

The council will deliver its budget earlier next year.

The last budget included a 5% rise in council tax, the switching off of street lights overnight and a charge for the collection of garden waste.

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