Council tax bills to rise at 'fastest rate for 20 years'

COUNCIL tax bills are set to rise at their fastest rate for two decades in the wake of Rachel Reeves’ spending review, according to the head of the Institute for Fiscal Studies.

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Paul Johnson said that local government in England did “perhaps a little bit better than it might have expected” out of the Chancellor's statement on Wednesday, but the “sting in the tail” is the assumption that “council tax bills will rise by 5% a year” as part of the funding.

The core spending power of councils is set to increase by 2.6% a year from next year, and “if English councils do choose 5% increases - and most almost certainly will - council tax bills look set to rise at their fastest rate over any parliament since 2001-05”, Mr Johnson said on Thursday.

On Wednesday, Ms Reeves said that ministers will not be “going above” the 5% annual increases in council tax.

She told ITV: “The previous government increased council tax by 5% a year, and we have stuck to that. We won't be going above that.