Council tax bills set to rise at fastest rate for two decades, economist warns
Paul Johnson said that local government in England did 'perhaps a little bit better than it might have expected' out of the Chancellor's statement on Wednesday, but the 'sting in the tail' is the assumption that 'council tax bills will rise by 5% a year' as part of the funding.
The core spending power of councils is set to increase by 2.6% a year from next year, and 'if English councils do choose 5% increases – and most almost certainly will – council tax bills look set to rise at their fastest rate over any parliament since 2001-05', Mr Johnson said on Thursday.
On Wednesday, Ms Reeves said that ministers will not be 'going above' the 5% annual increases in council tax.
She told ITV: 'The previous government increased council tax by 5% a year, and we have stuck to that. We won't be going above that.
'That is the council tax policy that we inherited from the previous government, and that we will be continuing.'
The biggest winner from Wednesday's statement was the NHS, which will see its budget rise by £29 billion per year in real terms.
Ruth Curtice, the chief executive of the Resolution Foundation, has said that Britain is turning into a 'National Health State'.
Overnight, the think tank said Ms Reeves' announcements had followed a recent trend that saw increases for the NHS come at the expense of other public services.
Ms Curtice said: 'Health accounted for 90% of the extra public service spending, continuing a trend that is seeing the British state morph into a National Health State, with half of public service spending set to be on health by the end of the decade.'
Defence was another of Wednesday's winners, Ms Curtice said, receiving a significant increase in capital spending while other departments saw an overall £3.6 billion real-terms cut in investment.
The Institute for Fiscal Studies (IFS) made similar arguments about 'substantial' investment in the NHS and defence coming at the expense of other departments, although Mr Johnson warned on Wednesday the money may not be enough.
In his snap reaction to the review, Mr Johnson said: 'Aiming to get back to meeting the NHS 18-week target for hospital waiting times within this Parliament is enormously ambitious – an NHS funding settlement below the long-run average might not measure up.
'And on defence, it's entirely possible that an increase in the Nato spending target will mean that maintaining defence spending at 2.6% of GDP no longer cuts the mustard.'
Ms Curtice added that low and middle-income families had also done well out of the spending review 'after two rounds of painful tax rises and welfare cuts', with the poorest fifth of families benefiting from an average of £1,700 in extra spending on schools, hospitals and the police.
She warned that, without economic growth, another round of tax rises was likely to come in the autumn as the Chancellor seeks to balance the books.
She said: 'The extra money in this spending review has already been accounted for in the last forecast.
'But a weaker economic outlook and the unfunded changes to winter fuel payments mean the Chancellor will likely need to look again at tax rises in the autumn.'
Speaking after delivering her spending review, Ms Reeves insisted she would not have to raise taxes to cover her spending review.
She told GB News: 'Every penny of this is funded through the tax increases and the changes to the fiscal rules that we set out last autumn.'
Conservative leader Kemi Badenoch described rising health spending as a 'conundrum', with a similar approach having been taken 'again and again' as she spoke at a business conference in central London on Thursday morning.
In reference to a pro-Brexit campaign stunt, Mrs Badenoch said: 'I mean, who remembers the side of a red bus that said 'we're going to give the NHS £350 million more a week'?
'Many people don't know that we did that. We did do that, and yet, still we're not seeing the returns.
'We've put more and more money in, and we're getting less and less out.'
The Government have not explained how and why the NHS will be better as a result of its spending plans, the Tory leader added, and claimed the public know 'we need to start talking about productivity reforms, public sector reforms'.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
37 minutes ago
- The Independent
Weight loss pill shows promise in new trial
A new weight loss medication, which can be offered by injection or tablet, can help patients lose a significant amount weight, studies suggest. An early study have found that people who received higher doses of amycretin as a weekly jab lost 24.3% of their body weight after 36 weeks of treatment. And initial trials assessing a tablet form of the drug also showed promising results, with patients taking daily tablets losing an average of 13.1% of their body weight after 12 weeks. Weight loss jabs have been hailed as transformative by NHS leaders. But injections come with additional work for over-stretched health services so tablet forms of medication may offer a new hope for the millions of people looking to lose weight. It has been estimated that around 1.5 million Britons are having weight loss jabs, which have been either prescribed through specialist weight loss services or private prescriptions. GPs will be able to dish out that jabs from next week. Amycretin, made by Novo Nordisk, helps to control blood sugar and appetite by targeting two specific receptors in the body – GLP-1 and the amylin receptor. An early trial in 125 adults testing weekly injections of amycretin, which has been published in The Lancet, found that those taking the highest dosage (60mg) lost 24.3% after 36 weeks of treatment. It also showed signs in improving blood sugar levels. Side effects included nausea and vomiting and were mostly mild to moderate and resolved by the end of treatment. 'These phase 1b/2a data support the potential of once-weekly subcutaneous amycretin as a therapeutic for people living with overweight or obesity,' the authors wrote. 'Amycretin appeared safe and tolerable, and there were significant reductions in body weight after 36 weeks of treatment.' The second early trial, published in the same journal, assessed amycretin in tablet form in 144 people over 12 weeks. There were mild to moderate side effects including loss of appetite, nausea and vomiting. Researchers found that people taking the highest dose of 100mg per day, lost 13.1% of their body weight over four months. The authors wrote: 'Amycretin effectively lowered body weight and improved metabolic and glycaemic parameters in people with overweight or obesity. 'Longer studies with more participants are warranted for evaluation of the safety and efficacy of amycretin in individuals living with obesity and type 2 diabetes, and to optimise the dosing regimen.' The studies were also presented at the American Diabetes Association's Scientific Sessions in Chicago, in the US. It comes as a separate study, which was published at the same meeting, examined the effects of weight loss jab Wegovy at higher doses. Researchers found that giving patients 7.2mg of Wegovy, also known as semaglutide, once a week led to an average weight loss of 20.7%, with a third of participants losing 25% or more of their body weight after 72 weeks.
Rhyl Journal
an hour ago
- Rhyl Journal
Liverpool newcomer Florian Wirtz motivated to build on Leverkusen achievements
The Premier League champions have paid Bayer Leverkusen £100million for the 22-year-old Germany international but that fee could potentially become a British record as there are £16m of add-ons included. If achieved that would surpass the existing mark of £115m which Chelsea paid for Moises Caicedo in 2023 and it is understood Liverpool will be happy to pay these 'aspirational bonuses' as it will mean they have enjoyed considerable success at elite level. And that is what Wirtz, one of Europe's hottest properties, is determined to contribute to. 'I'm not coming (to) have fun here, I want also to achieve something and give the fans what they deserve,' he told the club's website. 'Of course I want to keep going at this performance. So yeah, that sure gives motivation to achieve more. 'I would like to win everything every year. First of all, we have to do our work, I have to make my work. In the end, we want to be successful. 'Last season they won the Premier League, so my goal is for sure to win it again and also to go further in the Champions League. I'm really ambitious.' 🤩 — Liverpool FC (@LFC) June 20, 2025 Wirtz has signed a five-year deal and at 22 has his best years ahead of him. He wants to continue the progress which saw him score 57 goals and contribute 64 assists in 197 appearances for Leverkusen. 'This was also a big point for me: that I will improve my own personal level and physical levels because I think everyone knows that in Liverpool the players are machines – really strong and really physical,' he added. 'But I see this also as an opportunity for me to get better in this point. So yeah, I just thought this was the right place for me.' Liverpool saw off competition from Manchester City, Bayern Munich and Real Madrid to secure Wirtz. Leverkusen had valued him at £126m but a compromise was reached last week, although the up-front fee easily outstrips the £85m deal Liverpool agreed with Benfica in 2022 for Darwin Nunez, who is expected to leave this summer. 'I'm really excited to have a new adventure in front of me. This was also a big point of my thoughts: that I want to have something completely new, to go out of the Bundesliga and to join the Premier League,' he added. Wirtz is Liverpool's second signing of the summer, following close friend and Leverkusen team-mate Jeremie Frimpong to Anfield, and with the Valencia goalkeeper Giorgi Mamardashvilli joining next month after a deal was agreed a year ago spending has already reached £175m. That is set to be pushed beyond the £200m mark with a £40m fee agreed for Bournemouth left-back Milos Kerkez. It is their biggest summer window since 2018 when Naby Keita, Fabinho, Xherdan Shaqiri and Alisson Becker were recruited for around £170m, with Virgil van Dijk having signed for £75m the previous January. Owners Fenway Sports Group have, despite their 'Moneyball' reputation, not been afraid to splash out big fees for transformative players like Van Dijk and Alisson – and Wirtz falls into that category. The club have already recouped around £26m with the departures of Trent Alexander-Arnold and Caoimhin Kelleher with further funds expected to be generated from the likes of Nunez, Harvey Elliott, Federico Chiesa and potentially Andy Robertson, who is a target for Atletico Madrid.
Rhyl Journal
an hour ago
- Rhyl Journal
Lammy urges Iran and US to keep talking as Middle East conflict continues
The Foreign Secretary met his Iranian counterpart Abbas Araghchi in Geneva on Friday alongside foreign ministers from France and Germany and the EU's foreign policy chief. Following the meeting, Mr Lammy said the Europeans were 'keen to continue ongoing discussions and negotiations with Iran, and we urge Iran to continue their talks with the United States'. He added: 'We were clear: Iran cannot have a nuclear weapon.' Friday's meeting followed Donald Trump's statement that he would delay a decision on whether the US would join Israeli strikes against Iran for two weeks, raising the prospect of a negotiated solution to the crisis. German foreign minister Johann Wadephul said the group had left the room 'with the impression that the Iranian side is fundamentally ready to continue talking about all important issues'. Speaking to broadcasters after the meeting, Mr Lammy described the situation as 'perilous' and urged Iran to 'take that off ramp' and 'be serious about the diplomacy that is required at this moment'. He added that the US and Europe were pushing for Iran to agree to zero enrichment of uranium as a 'starting point' for negotiations. But Mr Araghchi said Iran would not negotiate with the US as long as Israel continued to carry out airstrikes against the country. Tel Aviv's campaign continued on Friday, with Israel saying its aircraft had hit military targets including missile-manufacturing facilities as it continues to attack locations connected with Iran's nuclear programme. Iran insists its nuclear programme is entirely peaceful. Meanwhile, the UK Government has announced it will use charter flights to evacuate Britons stranded in Israel once the country's airspace reopens. Number 10 said on Friday morning the situation remains 'fast-moving' and it will continue to be monitored closely. A spokesman added: 'We are advising British nationals to continue to register their presence in Israel and the Occupied Palestinian Territories, to be contactable with further guidance on these flights.' Mr Lammy said work is under way to provide the flights 'based on levels of demand' from UK citizens who want to leave the region. 'The UK will provide charter flights for British nationals from Tel Aviv when airspace reopens,' he said. 'The safety of British nationals remains our top priority.' According to the Israeli government, some 22,000 tourists are seeking to board evacuation flights. It is unclear how many of these may be UK citizens. Government advice for British nationals in the country remains to follow local guidance, as well as to let officials know about their presence within Israel or the Occupied Palestinian Territories. Land routes out of Israel remain open and British staff are on hand to support UK nationals who have crossed the border, he added. The move follows criticism of the Foreign Office's initial response, which saw family members of embassy staff evacuated while UK citizens were not advised to leave and told to follow local guidance. The Government said the move to temporarily withdraw family members had been a 'precautionary measure'. On Friday, the Foreign Office announced that UK staff had also been evacuated from Iran, with the embassy continuing to operate remotely.
