Millions of council tax payers are in line for increases of up to 5% in their annual bills from April, with those on low and middle incomes hit hardest by a sixth year of increases in England above the rate of inflation. Hundreds of councils must decide soon whether to raise the tax by the maximum allowed by government of 4.99%, or to make big cuts in services.
Manchester city council has told residents that without a 5% increase in bills it must make savings of £8.5m in addition to the £50m it is seeking to cut from current spending.
David Phillips, associate director at the Institute for Fiscal Studies, said council tax was a regressive tax that favoured wealthier people. “Council tax bills represent a larger share of income for low-to-middle income households than high-income households,” he said.