Council tax rates are likely to rise more under a Conservative government than a Labour one, in order to cover local government costs, the Institute for Fiscal Studies has warned.
The Tories have not allocated enough funding to meet local government requirements, even with a four per cent rise in council tax.
Boris Johnson’s team has pledged to maintain the £1bn increase already announced for 2020–21, but the only additional spend offered is a £500m-a-year fund for potholes.
As a result, councils “would have to rely overwhelmingly on increases in council tax revenues and business rates revenues to meet the rising demands for and costs of local public services”, the IFS said.
The think tank estimates that the Tories’ plan would actually see council rates go up more than under other party manifestos.
Labour has allocated “more than enough” to allow for an increase in service provision and quality without raising council tax, although it is still not enough to restore them to 2010 levels. Leader Jeremy Corbyn has done this through a range of other tax hikes, including corporation tax and capital gains, as well as pushing up the rate of income tax for higher earners.
The Liberal Democrats could fund their pledges through a two per cent rise in council tax, the IFS estimates.
All three parties have made unfunded pledges to reform adult social care, including commitments to relax means-testing or introduce caps to costs. Funding these pledges could require tax rises beyond those announced, or risk breaking parties’ fiscal rules, the IFS noted.
However the Tories insisted their manifesto commitments meant residents would not end up paying more for local services.
“Conservatives are the only party which has committed to protect local taxpayers from high council tax rises, by allowing residents to veto hikes via a local referendum,” a spokesman said. “Both Labour and Liberal Democrats would hike up property taxes on the homes of hard working people and pensioners.”
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