In a recent announcement, the UK Government confirmed that six financially struggling local authorities can raise their council tax rates by up to 10% to avoid bankruptcy. Despite a general increase in core spending power for London boroughs, a £500 million funding gap persists. Councils such as Newham and Birmingham are among those permitted to raise taxes significantly to manage costs, especially in social care and temporary housing. The Government's stricter rules requiring councils to justify such increases underscore the ongoing financial challenges faced by local governments.
The Government confirmed that six cash-strapped councils can raise tax beyond 5% to avoid bankruptcy, amid severe financial challenges in local authorities.
Deputy Prime Minister Angela Rayner highlighted that specific councils, such as Newham, can increase taxes significantly to balance their budgets and manage rising costs.
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