Three bankrupt councils given permission to raise council tax above 5% referendum limit

The government will allow three local authorities, which all have financial difficulties, to raise council tax above the referendum limit, by up to 15%. 

How close to the brink is DCC? – Owl

Kwame Boakye

The final local government financial settlement 2023-24 was published this afternoon and it confirmed that Thurrock Council and Slough BC had been successful in their requests to raise council tax by an additional 5%. [i.e. 10%]

Croydon LBC will be able to raise council tax by an additional 10% with the government revealing that due to “exceptional circumstance” and “unprecedented scale of financial deficits in each council” ministers had agreed to their requests. [i.e 15%]

Today the government said: “Given the exceptional circumstance in these council and unprecedented scale of financial deficits in each council, government has agreed to the requests.”

Thurrock issued a section 114 notice last year and has a funding gap of £469m. Essex CC has been appointed as commissioner to oversee its finances.

Croydon also issued a Section 114 notice in November 2022, effectively declaring bankruptcy, due to a £130m black hole in the following year’s budget. This was the third time in which the council declared bankruptcy in the last two years.

Meanwhile, budget papers published last year showed that Slough BC needs almost £0.5bn support from the government to achieve financial sustainability following years of “recklessness” in the management of its affairs.