Council tax to increase by 5% as Liverpool Council faces budget challenges

Liverpool residents could see their council tax bills increase by almost 5%.

Liverpool Council is to be recommended to approve the increase to meet its ongoing budget challenges.

As part of its annual monetary planning, the local authority has set out its proposals for the next financial year, with a series of savings still to be made. The next 12 months marks the second of a three year process to close a financial black hole of £85m.

As a result, cabinet members are to recommend the maximum increase available to them – 4.99% –  in a bid to ease pressure on the council coffers.

Despite more than half the £85m shortfall being delivered in the current financial year, Liverpool Council is still seeking to make tens of millions of pounds in savings this year. As a result, the city’s cabinet is expected to sign off on plans to recommend the full authority backs proposals to raise council tax by almost 5%.

Local authorities are required to seek approval via a referendum for council tax increases at or above a specified threshold, this was set at 5% for 2024/25. The majority of this can be used for any services, with an additional 2% solely to address the continuing adult social care pressures.

It is thought this would generate more than £4m for Liverpool Council. An increase of 4.99% in 2024/25 would equate to an additional £64.81 per year or £1.25 per week for a Band A property. For a band B property, it would equate to £75.60 per year – £1.45 per week.

In outlining why the council would seek to raise the rates for households at the highest amount for the second year running, financial officers wrote: “This has been hugely challenging, at a time when the council like all other local authorities is facing significant financial challenges in the current year. The unrest in Ukraine and more recently the Middle East has contributed to the cost-of-living crisis driven by high inflation impacting on the costs of goods and services including energy and fuel. 

“All of which not only makes the cost of running council services more expensive but also affects many residents and results in a greater demand on council services, particularly adults and children’s social care and homelessness. Added to this the council’s spending power has not kept pace with demand, wage and price rises that it is contending with. 

“Like last year, this means that the council will need to make difficult decisions in planning the delivery of local services.”

The cabinet budget plans will be considered first by an extraordinary meeting of the authority’s finance and resources scrutiny committee on Thursday, before adoption when the executive meets on Tuesday February 20. This will then go forward to a special budget meeting of the full council next month.