NALC welcomes government plans not to extend council tax referendum

The National Association of Local Councils (NALC) has welcomed the government's plans not to extend council tax referendum principles to England's 10,000 local (parish and town) councils.

The Department for Levelling Up, Housing and Communities published on 16 December 2021 the Provisional Local Government Finance Settlement 2022/23, which confirms the government does not propose extending local councils the requirement to hold a referendum on increased council tax.

The relevant section from the consultation is below:

3.5 Council tax referendum principles for town and parish councils.

3.5.1 The government has not previously set referendum principles for town and parish councils. This approach was contingent on the sector taking all available steps to mitigate the need for council tax increases and the government seeing clear evidence of restraint.

3.5.2 In 2021/22, the average Band D parish precept increased by 2.8%, the smallest for ten years. In expectation that parish and town councils continue to show restraint when charging council tax, the government proposes to continue with no referendum principles for the sector in 2022/23. It will, however, take careful account of the increases set in 2022/23 when reviewing the matter ahead of next year's settlement.

The final settlement is due publication in early 2022 after that debated and agreed upon by the House of Commons.

Cllr Keith Stevens, NALC chair, said: "It is good the government has listened to NALC's call for the first tier of local government to have continued financial flexibility and autonomy. It will allow local councils to continue leading their places and investing in community services and priorities through their small share of council tax, without the need to hold a referendum on increases. But we will continue to make a case for a multi-year exemption to provide certainty and allow local councils to plan for the future.

"While local councils are continuing to increase investment in their communities, they are demonstrating restraint and fiscal responsibility and looking out for taxpayers. The increase in the average Band D precept of 2.8% in 2021/22 was significantly lower than the 4.4% increase by principal councils and their lowest increase in a decade. However, local councils' slowing down of additional investment in communities is not sustainable. It underscores the need for local councils to access directly dedicated government funding such as for high streets, town centres, parks, leisure centres and other community assets."

Read the Provisional Local Government Finance Settlement 2022/23