Liverpool and Knowsley approve maximum council tax increase - what it means for you

Liverpool Council has approved a council tax increase of almost 5% - the maximum amount possible for the new financial year. Confirming the increase at a council meeting on Wednesday (March 6), council leader Cllr Liam Robinson said the city had taken 'hardheaded decisions to deliver a fiscally prudent and balanced budget' having had finances 'cut to the bone'.

As the city council made its plans for the next financial year, a series of recommendations to set a balanced budget put forward by the Labour cabinet have been adopted. This includes raising rates for households to the maximum amount possible for 2024/25. Local authorities who wish to exceed the maximum council tax rise - set at 5% for the 2024/25 financial year - are required to hold a referendum, however, councils across Merseyside have confirmed they will hike the price by 4.99% with 2% spent on Adult Social Care services.

Cllr Carl Cashman, leader of the opposition Liberal Democrats, described Liverpool Council's proposals as 'the Sam Allardyce budget, as it’s barely keeping them above the relegation zone'. He added: “We all share a view about this budget, it’s set in the context of an uncaring Tory government and an incompetent Labour council.”

The next 12 months marks the second of a three year process for Liverpool Council to close a financial black hole of £85m. Despite more than half of the shortfall being delivered in the current financial year, the city council is still required to make tens of millions of pounds in savings this year. 

• Council tax increase: How much you could pay after price rise - and how your money will be spent
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The amount you pay, or your Council Tax band, depends on the valuation of your property. For example, in Liverpool, an increase of 4.99% in 2024/25 would equate to an additional cost of around £64 per year for a Band A property - the lowest band and the rate paid by most council taxpayers across Merseyside. However, Band H households could see a hike of more than £179 per year. The increase will be in effect from April 1, 2024 until March 31, 2025.

Liverpool Council's council tax hike, which is expected to generate £235m over the next financial year, however, the local authority's Adult Social Care bill for 2024/25 will be £247m - outstripping the proposed revenue.

Cllr Alan Gibbons launched a stinging attack on the Labour administration, saying there was 'nothing to crow about' and said he was thankful Liverpool wasn’t in a similar situation to Birmingham or Nottingham. He added: “There needs to be some humility in this chamber.”

Cllr Robinson dismissed amendments to the budget put forward by the Liberal Democrats, Liverpool Community Independents and Liberal Party groups as 'politically trivial'. They were defeated in favour of the substantive budget motion put forward by Labour by 54 votes to 20.

Knowsley Council also approved the maximum council tax increase for its residents on Wednesday, despite lobbying central government to provide alternative grant funding to avoid excessive increases.

In a speech to cabinet, Cllr Jayne Aston said Knowsley Council had been left ‘battered and bruised’ by Tory under-funding. She said: "It really pains me to say it Mr Mayor, but we have no option but to increase Council Tax. We continue to tell the Government that Council Tax isn’t a fair way to fund local services and social care. Either they choose not to listen, or they are choosing not to care, either way the Government leave us with no choice. So, with a heavy heart, our proposal has to be for an increase of just under 5%, with at least 2% of the increase going straight to Adult Social Care services.”

Across Merseyside, overall council tax is calculated based on your local borough council's service charge, an Adults Social Care precept, the Merseyside Police and Crime Commissioner precept, Merseyside Fire and Rescue precept, and the Liverpool City Region Mayoral precept. The Merseyside Police and Crime Commissioner precept will also increase by the maximum threshold, equating to an increase of £8.67 per annum for Band A properties across Merseyside.