It's nearly that time of year again.
Not Christmas, but the annual reveal of how much more money you'll need to hand over to your local council in taxes.
While the increase ‒ and the exact size of your annual Council Tax bill ‒ will vary by region, many of us will be facing another sharp jump in our bills in the new financial year.
And there are big questions around just how sustainable these increases really are.
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Big hikes, year after year
For the 2021/22 financial year, the typical household was hit with a Council Tax hike of 4.4% or £81, which was followed by a hike of 3.7% or £65 in 2022/23.
In April, the majority of households saw their Council Tax bills rise by 4.99%, which works out to an extra £99.
And the early indications are we're in for much the same in the 2024/25 financial year: Cornwall and Croydon councils have been among the first to announce their planned hikes, with both opting for the maximum-allowed 4.99% increase.
Finances already under pressure
Now, on the face of it, Council Tax hikes might not seem like a huge deal.
For the typical Band D property, this year's hikes worked out to a little over £8 a month spread over 12 months, and next year's will probably come in at under £10 a month.
But of course, these hikes don't exist in isolation: in the last few years, household finances have been hammered first by the pandemic lockdowns and then by the ongoing cost of living crisis.
Many households don't have the money to cover existing bills – let alone next year's hikes.
We're already seeing evidence of this: in the Summer, data from the Money Advice Trust revealed how Council Tax arrears have rocketed 69% over the last five years, and 10% in the previous 12 months.
This isn’t the fault of councils
It’s worth emphasising that this problem isn’t down to the councils themselves.
It’s no secret that the funding they receive from central Government has been slashed in recent years, leaving councils already having to make difficult decisions about where they spend money and how much they charge residents.
Things can’t carry on this way
As I highlighted in this earlier article on rising Council Tax debt, things cannot carry on in this fashion.
Massive increases every year are unsustainable ‒ the Government desperately needs to review the way that it funds councils.
But we also need fresh thinking when it comes to handling the arrears that build up.
More support for Council Tax support schemes ‒ which allow some to apply for Council Tax reductions ‒ to help prevent the arrears being built up at all, would be a good start, while a more flexible approach to collecting the money owed is also badly needed.