Many households could face paying hundreds of pounds extra as the Office for Budget Responsibility expect council tax bills to be a third higher in 2026 than they were last year. The report published said receipts will be £12.1billion higher in 2026/27 than they are now which is on average over £400 extra per household.
However, town halls could potentially see their council tax bills increase by up to £57 extra by April if local authorities do go ahead with the three percent rise.
For some Britons, their average bill could rise to £1,955.
In the last few years, Council Tax has risen to help meet rising care costs and for general spending.
Townhalls could easily add a ‘precept’ for homeowners to pay more for social care.
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The OBR said: “Net council tax receipts continued to rise in 2020/21 despite the pandemic (by six percent) and are expected to continue to rise at similar rates across the forecast period
“By 2026/27, we expect receipts to be £12.1billion (33 percent) above their 2019/20 level.
“This largely reflects policy measures allowing councils to increase the adult social care precept on council tax bills, over and above the almost two percent increases in core rates included in our baseline forecasts.”
The potential three percent rise was mentioned in the Treasury’s red book.
The Tresury’s red book stated: “To ensure that all local authorities have access to the resources they need to deliver core services such as children’s social care, road maintenance and waste management, the referendum threshold for increases in council tax is expected to remain at two percent.
“In addition, local authorities with social care responsibilities are expected to be able to increase the adult social care precept by up to one percent per year.
“The Department for Levelling Up, Housing and Communities will set out full details of the council tax referendum principles and proposed approach to allocating grant funding through the Local Government Finance Settlement.”
A recent study from the Institute for Fiscal Studies (IFS), asserted that under current Government spending plans, Council Tax increases of 3.6 percent would be necessary for the next three years.
This would be to ensure councils can continue to provide the same range and quality of services in 2024/25 as was provided pre-pandemic.
A spokesman said: “Bigger council tax rises than the Government plans to allow could be necessary to maintain services.”
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