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Households Face £9.4bn Rise in Council Tax by 2029, Labour Confirms

Households Face £9.4bn Rise in Council Tax by 2029
Image Source: By Reuters

English households could face a £9.4bn rise in council tax bills by the end of the decade, ministers have admitted, with increases expected to hit the maximum allowed under law.

Figures revealed through a Freedom of Information request show council tax receipts in England are forecast to climb by 26% by April 2029 – from £36.2bn in 2024/25 to £45.6bn.

The disclosure comes after the government said in June that local authority “spending power” would increase by 2.6% in real terms over the parliament. However, two-thirds of that rise is expected to come from higher bills for households rather than direct government funding.

Calls for reform

The prospect of steep annual increases has sparked debate about the fairness of the system. Andy Burnham, the Mayor of Greater Manchester, urged Sir Keir Starmer to consider reform that would see wealthier homeowners in London and the south-east pay more.

Reports suggest Baroness Shafik, the prime minister’s chief economic adviser, has asked Downing Street to examine options for revaluing council tax bands, last set in the early 1990s.

Pressure on households

Council tax can legally rise by up to 5% a year without requiring a local referendum. Earlier this year, some authorities were permitted to go further, with one council granted approval for a 25% increase amid financial pressures.

The Office for National Statistics reported inflation stood at 3.8% in the year to August 2025 – meaning council tax hikes in many areas will continue to outpace the wider cost of living.

Chancellor Rachel Reeves is preparing her first budget in November against the backdrop of a £30bn hole in the public finances, according to OECD estimates. Restricted by Labour’s promise not to raise income tax, National Insurance or VAT, and by rules limiting borrowing, council tax increases are seen as one of the few remaining levers available to shore up local services.

Political fallout

The Conservatives accused Labour of breaking its promises to working families. Sir James Cleverly, the shadow housing secretary, said the figures showed ministers had been “caught red-handed hiking council tax on middle England”.

“This is the tip of the iceberg of soaring tax bills that family homes now face,” he said, claiming Labour was misleading Parliament about the true scale of government funding for councils.

A spokesperson for the Ministry of Housing, Communities and Local Government said the figures were estimates, not predictions of actual revenues, and stressed that councils were free to decide the level of tax rises in their areas.

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