The average council tax bill in Great Britain has increased by 91% over the past decade, according to new Halifax research...

The 91% increase is significantly higher than the following over the same period:

• a 31% rise in the headline rate of the Retail Price Index.
  
  
• a 44% increase in the price of services.
  
  
• a 51% growth in average earnings.

The average council tax per dwelling¹ in Britain in the current financial year (2007-08) is £1,078 compared to £564 in 1997-98. 

More than one in two areas have seen at least a doubling in council tax bills in the last ten years, with Monmouth experiencing the biggest percentage increase since 1997-98 (184%) followed by Powys (150%) and Westminster (149%).

Despite recording one of the biggest increases over the past decade, Westminster continues to have one of the lowest council tax rates with an average bill of £773 in 2007-08, the seventh lowest in the country

South East hit hardest

Regionally, the average council tax bill per dwelling is highest in the South East (£1,255) and the East of England (£1,184).  Council tax per dwelling is lowest in Wales (£871) and Yorkshire & the Humber (£959).

Average area council tax charges have more than doubled since 1997 in 215 billing authorities in Great Britain (53% of the total), with Richmond-upon-Thames recording the highest average council tax bill in the country at £1,665.  This is a massive 106% higher than in 1997-98 (£807).

The average council tax bill in Wandsworth in 2007-08 is £641, the lowest in the country.  This is 65% higher than in 1997-98 (£388).  Ten years ago, Westminster had the lowest average bill in Britain (£310).

Prices cheaper in the North and Wales

Major cities outside the south of England feature prominently amongst those authorities that have experienced the smallest percentage rises in average council tax charges since 1997, with some of the smallest rises seen in Liverpool, Manchester and Glasgow.

Eleven of the 30 areas with the lowest average council tax bill per dwelling are in Wales.  Five of the lowest areas are in Scotland and four are in the West Midlands.  In 1997-98, 16 of the 30 areas with the lowest average bills were in Wales.

Almost one in four – 86 out of the 354 billing authorities in England - have sent out an average area charge of under £1,000 for the current tax year (2007-08).  This compares with almost two in three billing authorities – 20 out of 32 - in Scotland and nine in ten – 20 of the 22 – billing authorities in Wales.

Martin Ellis, Chief Economist, commented:

"Council tax bills have increased significantly faster than either average earnings or retail prices over the past ten years.  Bills diverge across the country. Growth rates over the last decade differ by a wide margin between billing authorities too."

LGA disputes 'rehashed' figures

Responding to the press release issued by Halifax Plc on council tax, the Chairman of the Local Government Association, a cross party organisation which represents councils in England, Sandy Bruce-Lockhart, said:-

“It is both extraordinary and utterly puzzling why the Halifax has chosen to start analysing public policy. These figures, and this so-called research, is nothing more than a rehash, rehashing a rehash of information that has been published and in the public domain for months.

“The overall national picture shown by this research is supporting what councils have long argued which is that the council tax has been forced up by government to a level that local people cannot afford.

“Councils can, and are, maintaining their own costs at the rate of inflation or less, but we should not have to pay for extra costs such as landfill tax and the cost of new legislation.

"Demand for social care is rising every year. In the next three years alone, there will be over 400,000 more older people, many of whom will require social care but at the moment no additional funding for the increasing number of elderly has been provided.

'Better deal for the taxpayer'

"Waste volumes are rising each year, landfill tax is rising by 30% each year and soon local government will face penalties of over £200m if we exceed our landfill allowances. There will need to be increased spending on rubbish collection and disposal by 10% each year to meet the EU landfill directive.

"Local government is determined to provide an ever better deal for the taxpayer. The Treasury has reported that councils lead the public sector in efficiency gains. The Audit Commission reports that seven out of ten of the biggest local authorities are improving well or strongly.

"Government must decide and say if it is going to pay for the rising costs of its own legislation and more elderly people or if it is expecting the council taxpayer to once again pick up the bill.

“Publishing individual council data distorts the challenges that each individual area faces. Councils have pulled out all the stops in the annual struggle to keep bills down. This year councils delivered the second lowest rise in council tax for over a decade which was below inflation and shows that councils are putting local people first.”

Source: Halifax/LGA