New council tax bands in England and Wales mean £217 increase for households

New council tax bands in England and Wales mean a £217 rise for some households. Households in England and Wales have been warned that Council Tax bills are set to increase by an average of £109 per household from April.

But for some, the rise could be even higher - at £217. It was confirmed that the 4.99 per cent threshold would remain the same by Labour Party leader Sir Keir Starmer’s press secretary on Wednesday. The increases could raise an additional £1.8bn for councils in 2025-26, communities minister Matthew Pennycook has said.

Government statistics show the average band D council tax set by local authorities in England for 2024-25 was £2,171, which represented an increase of £106 or 5.1% on the previous year. For those in the most expensive band H households, last year’s £4,342 bill will increase by £217.

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Shadow communities minister David Simmonds told the Commons: “Answers to parliamentary questions show that the Government is expecting spending power to increase by £3.7 billion, funded by grants of £1.3 billion. That demonstrates that the Chancellor’s Budget has opened up a £2.4 billion black hole in council finances.”

Mr Pennycook replied: “The Government is committed to a fair funding settlement for local government. We will set out further details in the usual way in the upcoming local government finance settlement, which will be presented to Parliament.

“On the £2.4 billion figure, I’m afraid we simply don’t recognise it. I assume (Mr Simmonds) in his calculations has failed to take account of the over £300 million raised in business rates, £300 million in additional new houses to come along.

“So it is right that £1.8 billion will be raised through council tax in 2025/26, but as I made clear that is because the Government is clear that we’re maintaining the previous government’s policy on council tax, in line with the OBR (Office for Budget Responsibility) forecast made in March 2024.”