Reform-led Worcestershire county council is likely to issue England’s largest council tax rise this April after it was given special permission by the government to increase it by up to 9%.
Worcestershire is one of a handful of authorities whose requests to be allowed to increase local rates above the standard 5% cap from April have been accepted by ministers.
Its cap-busting tax hike will be embarrassing to Reform UK nationally, which has made low council tax a political priority; while it has already led to one local Reform councillor quitting the party in protest.
Ministers have also announced the government will clear about £5bn of historical debts accumulated by English councils who have overspent on special educational needs and disability (Send) services in recent years.
An extra £440m in so-called recovery grants for councils in economically deprived areas was unveiled, in a bid to head off criticism from northern Labour MPs that their local areas had lost out under a new funding distribution formula.
In a Commons statement, Alison McGovern, the local government minister, said the finance settlement showed the government was delivering on improvements that would make councils “agents of renewal in building a new, better country”.
The following councils have been given permission to set cap-busting rate rises from April: Bournemouth, Christchurch and Poole (up to 6.75%); Warrington (7.5%); Trafford (7.5%); Worcestershire (9%); Shropshire (9%); North Somerset (9%); and Windsor and Maidenhead (7.5%).
The government said each of these areas have had historically low council tax rates and above-limit rises would bring household bills up to average council tax levels.
Ministers said they would spend about £5bn clearing 90% of each local authority Send debt accumulated by this April. Council leaders had said that without intervention these debts would push 90% of councils into effective bankruptcy by 2028.
Debt write-offs will be conditional on local authorities agreeing to local plans to implement Send updates in line with government plans expected to be outlined in an imminent white paper.
While councils welcomed the move, several authorities with high overspends such as Hampshire county council will still be left with tens of millions of pounds of debt. English councils’ total accumulated Send debts at April are expected to be £6bn.
It is unclear how billions of pounds of expected Send overspends between April 2026 and April 2028 will be handled. Ministers said they would “continue to take an appropriate and proportionate approach, though it will not be unlimited”.
Louise Gittins, chair of the Local Government Association, which represents councils across England, said the partial write-off of Send debts removed the immediate threat of insolvency for many councils.
She said: “This is recognition that these costs are not of councils’ making and have accrued due to a broken system that is urgently in need of reform. However, fully writing off historic and future high needs deficits remains critical.”
Worcestershire’s Reform leadership has admitted its finances are in “a mess”. As well as having large council tax rises, it has applied to the government for permission to borrow £71m from April in a bid to avoid effective bankruptcy. It has blamed previous Tory mismanagement for the crisis.
Attempts by Reform-led Warwickshire county council to push through a lower-than-expected 3.89% council tax rise last week failed after opposition parties said this would lead to more cuts to services, and could put the viability of the council at risk.
Sir Stephen Houghton, chair of the Special Interest Group of Municipal Authorities, welcomed the uprated recovery grants, saying: “We strongly welcome the additional money being targeted to places with significant deprivation and needs.”
