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Where does your council tax money go?

Almost half of the council tax we pay goes towards care services for adults and children – and that share could be set to grow significantly by 2019/20, new research shows. For every ?1 we pay via council tax in 2019/20, 56p will be spent on caring for the elderly, vulnerable adults and children – up from 49p in 2016/17, according to Local Government Association (LGA) forecasts. Rising demand for these key services, coupled with a fall in central government funding, will result in a larger proportion of funds being diverted to care.

Council tax also funds services like maintaining roads, collecting bins, providing bus services and cleaning streets. So how do councils decide where to spend tax revenue? Which? takes a look.

How councils fund their work

Council tax is the main source of income for most local authorities.

On average, each household in England pays ?1,591 a year towards funding vital services. Since 2015, many council have been receiving help from central government through the Revenue Support Grant. But by 2020, local governments in England will lose 75p in every ?1 of the Revenue Support Grant they started receiving in 2015, and nearly half will stop getting the extra cash completely.

This may mean councils will be entirely reliant on council tax revenue to fund their services, or change the way funding is allocated.

What your Council Tax money is spent on

The LGA has analysed data from the department for communities and local government to show how council tax spending could change by 2019/20 as council budgets shrink. You can use the interactive chart below to see how the proportion of spending on key services is forecast to change in the next two years compared to the latest available data from 2016/17. The largest portion of tax goes towards children’s and adults social care, and these areas are also due to see the largest increases.

Behind by a large margin are Education and Housing, which are also likely to see more funding invested in coming years. By contrast, other services are likely to see decreases in their share of tax revenue – with the biggest fall in Waste Management, which will drop from 7.97p in the pound to 6.04p.

Help us tackle the creaking care system

The care system is close to breaking point – Which? research recently found that 71,215 extra elderly care beds[2] will be needed by 2025. Which? is calling on the government to ‘put care into the care system’ by taking action to ensure there are good care homes across the UK – now and into the future.

Which? needs 100,000 signatures to launch a complaint to the Competition and Markets Authority – if you’d like to voice your support, you can sign our petition.[3]

References

  1. ^ Council tax (www.which.co.uk)
  2. ^ 71,215 extra elderly care beds (campaigns.which.co.uk)
  3. ^ our petition. (campaigns.which.co.uk)

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