Government launches consultation into council tax reform: what the changes could mean for you?

A big shake-up could be coming to council tax bills across the UK.  

If you’ve ever felt like your local council tax keeps going up but you’re not seeing much in return, you’re not alone. But a proposal by deputy prime minister Angela Rayner aims to fix that. 

What’s potentially changing? 

Around half of all local council funding currently comes from central government. The rest is made up largely of council tax. But the way that central funding is distributed hasn’t always felt fair, especially for areas facing high demand for services like adult social care, housing support and children’s services. 

Under the new plan, areas with the greatest need would receive more support from the government. That means they wouldn’t have to lean so heavily on residents through big council tax hikes. 

Why this matters 

Many councils have been forced to raise council tax every year just to keep basic services running.  

Meanwhile, other areas with stronger local economies and bigger tax bases have been able to keep their tax bills low without sacrificing public services. 

Talking to the Times newspaper, an official from the Ministry of Housing, Communities and Local Government (MHCLG) said the current system creates “perverse outcomes”, where some councils are really struggling and others are relatively comfortable. 

What could it mean for your bill? 

If your council is in a high-need area, the changes might mean smaller increases to your bill.  

But if you live in an area that hasn’t seen big hikes in recent years, that could change. Some councils may need to raise more money locally to make up for reduced central funding. 

So while the aim is to make the system fairer overall, the impact will vary depending on where you live. 

A focus on social care and SEND services 

As part of the reform, the government is also looking at how it funds adult social care, children’s social care and special educational needs and disabilities (SEND) services. These are critical areas where demand is growing fast, and the current funding just isn’t keeping up. 

Minister for local government and English devolution Jim McMahon said the reforms are urgently needed: 

“We inherited a local government sector on its knees - councils pushed to the financial brink, facing rising demand and working people not receiving the quality local services they rightly deserve.” 

A long-overdue update 

These reforms are being pitched as part of the government’s broader ‘plan for change’.  

The aim is to put councils on more stable financial ground and improve services for everyone, especially working families who rely on them most. 

Councillor Pete Marland from the Local Government Association also welcomed the consultation, saying: 

“An opaque funding system has weakened councils' financial sustainability and vital public services... A transitional mechanism is crucial to avoid putting services at risk.” 

What happens next? 

The MHCLG has launched a formal consultation to work out the details. That includes figuring out how to measure need and how to make sure changes don’t put services in jeopardy during the transition. 

It’s still early days, but the potential impact on local services - and your council tax bill -could be significant. 

We’ll keep an eye on the consultation process and update you as things develop.