Coventry Council Leader Suggests 5% Tax Hike Is Highly Probable

The leader of Coventry’s local authority has indicated that a 5% increase in council tax for the upcoming year is highly probable. George Duggins informed the BBC that the council is formulating its budget for the next year assuming this increase will be the highest permissible. This statement follows the government’s confirmation that it will maintain the limit on council tax increases for local authorities at 5%. While councils possess the option to raise the tax rate beyond this threshold, such an action would necessitate a public referendum on the proposed increase. Local authorities throughout the UK have encountered substantial financial difficulties in recent years, with certain councils, such as Birmingham, effectively declaring bankruptcy. Coventry’s authority, specifically, has been reducing its expenditures to counteract the escalating costs of services, notably social care and temporary housing. The Labour-led council must identify an additional £10 million in savings this year to achieve a balanced budget. Duggins stated that the council had received assistance from the chancellor’s Budget, which allocated an extra £1.3 billion for local government in the 2025-26 fiscal year. He commented, “We’re hopeful we’re going to be in a better position than we’ve previously been.” However, when questioned about ruling out a maximum council tax increase of 4.99%, he responded: “I think it’s very likely that we will be working on that assumption. The government has made it very clear that they are working on the assumption that authorities will raise council tax by 4.99%. We are planning on that basis.” On Wednesday, the prime minister’s spokeswoman affirmed that the council tax threshold “remains the same.” The specific threshold for triggering a public vote, or referendum, is set at 5% for councils that manage social care responsibilities and 3% for those that do not. Duggins has defended the council’s choice to appoint two new directors, each earning salaries of up to £130,000. The local Conservative party criticized the authority, alleging it was hiring “luxury leadership” at a time when it is contemplating additional reductions to public services. However, Duggins asserted that the newly created positions would “add to the strength of the council.” He further stated, “We believe this strengthens us or we would not agree to these posts. I would not agree to these posts.” The responsibilities of these directors will include focusing on expenditure reduction and improving communication with residents. Duggins also remarked: “I’ve been getting my message across and of course we want to get the message across as to what the council does so people understand that.” The council is scheduled to present its budget earlier next year. The previous budget incorporated a 5% increase in council tax, the overnight deactivation of street lights, and the introduction of a fee for garden waste collection.