Council Tax Increases: Fewer Maximum Hikes, But Widespread Rises Persist
New analysis indicates that the number of local authorities in England planning to impose the maximum permitted council tax increase has decreased this year. However, the majority of areas are still facing significant rises, with over 80% of top-tier councils proposing hikes of at least 4.99%.
According to data compiled by the Press Association as of February 25, 2026, 119 out of 153 upper-tier authorities have either proposed or confirmed a council tax rise of 4.99% for the 2026/27 financial year. This represents the largest increase allowed without triggering a local referendum. An additional six councils with severe financial challenges are likely to accept government permission to exceed this threshold, bringing the total to 125 authorities, or 82% of the total.
Regional and Political Variations in Council Tax Plans
The figures show a slight decline from last year, when 134 councils (88%) planned maximum increases. Among the 25 councils not seeking rises of at least 4.99%, eight have pencilled in increases between 4.00% and 4.98%, nine are between 3.00% and 3.99%, and the remaining eight are between 1.99% and 2.99%. Notably, 10 of these 25 councils are run by Reform UK, either as a majority or minority administration.
In contrast, two Reform-led councils—Doncaster and North Northamptonshire—have signalled intentions to apply the maximum 4.99% increase. Worcestershire, another Reform-led authority, has been granted permission for a rise of up to 8.99% to address financial pressures. Reform UK has pledged to lower taxes at both local and national levels, but its leaders in Worcestershire have warned that the council could face effective bankruptcy due to a financial crisis.
Government Reforms and Financial Pressures
The government has recently reformed the local government finance system, aiming for a fairer distribution of funding through changes to allocation formulas and multi-year settlements. Despite this, the Local Government Association has cautioned that some councils will still see their funding fail to keep pace with inflation and rising demand for services.
Greg Stride, principal researcher at the think tank Local Government Information Unit, commented: “The outcome of the Fair Funding Review has altered the grants local governments receive from central government, providing a temporary reprieve for a small number of councils from raising council tax. However, increasing cost pressures mean this is unlikely to last, and government forecasts assume councils will raise council tax by the maximum amount in future years.”
Notable Exceptions and Political Dynamics
Among councils granted permission to raise council tax above 4.99% in 2026/27, North Somerset and Shropshire have both proposed the highest increase of 8.99%, with Worcestershire opting for 8.98%. North Somerset is led by a coalition of Labour, Liberal Democrats, Greens, and independents, while Shropshire has a Lib Dem majority. Other councils considering increases above 4.99% include Trafford and Warrington, both run by Labour, along with Lib Dem-controlled Windsor & Maidenhead, all permitted to raise taxes by up to 7.49%.
Reform-led councils have shown varied approaches: West Northamptonshire, Derbyshire, and Warwickshire have opted for rises of 4.95%, 4.90%, and 4.40% respectively; Kent, Nottinghamshire, and Staffordshire are set to increase by 3.99%; and Lancashire has proposed a 3.80% rise. Smaller increases have been approved in Leicestershire (2.99%), Lincolnshire (2.90%), and Durham (1.99%).
Opposition and Government Response
In Kent, Reform cabinet members faced criticism from opposition councillors, who described the budget as “extremely risky” and “potentially reckless.” Council leader Linden Kemkaran defended the decision, stating that Reform would prefer no increase but cited “the dire legacy we inherited” and unprecedented rises in service costs, making it unavoidable.
A Ministry of Housing, Communities and Local Government spokesperson said: “Local authorities decide the level of council tax they wish to set, which reflects the service needs of each area, and we are clear that in doing so they should put taxpayers first. We have made over £78 billion available for council finances next year, an increase of over 6% compared to 2025/26, with the majority of money un-ringfenced so local leaders can decide for themselves how best to spend on their local priorities.”
Regional Breakdown and Future Outlook
The analysis also highlights regional disparities: in the East Midlands, only three of 10 upper-tier councils plan maximum increases, while in eastern England, 10 of 11 are looking to do so. In London, all boroughs except Barnet (4.98%) and Merton, Wandsworth, and Westminster (2.00%) are opting for 4.99%. The north-east includes eight councils seeking 4.99%, with others choosing lower rates. In the North West, all but one council plan at least 4.99%, and in Yorkshire & the Humber, 12 of 15 want maximum hikes. Kent is the only outlier in the South East, and Torbay in the South West (4.75%). In the West Midlands, 11 councils are set for maximum increases, with three choosing lower rises.
As councils navigate financial challenges, the trend suggests that while fewer are imposing the absolute maximum, sharp increases remain widespread, impacting households across England.
