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Council tax: local referendums

Published Thursday, December 22, 2016

This briefing note explains the system of referendums on council tax increases in local authorities. It sets out the legislative framework and the thresholds that have been set in previous years.

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From the 2012-13 financial year, local authorities, fire authorities, and Police and Crime Commissioners have been required to hold a referendum if they wish to increase council tax by more than a set percentage. This is fixed by the Secretary of State each year: often it is set at 2% for most classes of authority.

Draft thresholds have been published for the 2017-18 financial year. A local authority must hold a referendum if it wishes to increase council tax by these amounts or more:

County and unitary councils: 5%, of which 3% must be spent on adult social care (the 'social care precept');

District councils: 2%, or up to and including £5 on a Band D bill - whichever is the greater; 

Police and Crime Commissioners (PCCs): 2% (those with council tax levels in the lowest quartile may raise council tax by up to and including £5 on a Band D bill without a referendum);

Fire and rescue authorities: 2%;

The Greater London Authority: 2%.

As in previous years, no principles are to be applied to parish and town councils.

Referendums must be organised by billing authorities and there is provision for recovery of expenses where the referendum is held on behalf of a precepting authority. Rules for the conduct of referendums have been set out in regulations.

Commons Briefing papers SN05682

Author: Mark Sandford

Topics: Local government, Taxation

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