Council Tax Rises By 4.9% As Increases Continue To Outpace Inflation

Council tax for the average Band D property across England and Wales will rise by 4.9% in 2026/27, reveals analysis undertaken by the Chartered Institute of Public Finance and Accountancy (CIPFA) and Infoshare+.  

Council tax for the average Band D property across England and Wales will rise by 4.9% in 2026/27, according to new analysis from CIPFA and Infoshare+.

The average Band D bill now stands at £2,348.08. While slightly lower than last year’s 5.1% increase, the rise remains above January’s inflation rate of 3.2%, meaning households will continue to see council tax increases outpace the cost of living.

The analysis highlights significant regional variation. The South West has the highest average bill at £2,550.07, compared to £2,068.28 in Greater London — a difference of £481.79. Households in the South West will also see the largest percentage increase at 5.4%.

Seven councils have been granted permission to increase council tax above the 5% referendum threshold, with rises of up to 9% in some areas.

Council tax continues to play an increasingly important role in local authority funding. However, rising demand for services and ongoing cost pressures mean increases alone are unlikely to close funding gaps. Wider changes to the local government finance system, including business rates reform and the Fair Funding Review — will also redistribute resources between areas, with varying impacts across the country.

The Rural Reality

For rural areas, these trends raise particular concern. RSN analysis of the Local Government Finance Settlement shows that rural residents will pay, on average, 17% more in council tax per head than their urban counterparts in 2026/27.

At the same time, urban councils are set to receive around 32% more per head in government-funded spending power, reinforcing long-standing disparities in how funding is allocated. Over the longer term, this gap widens further, with projections suggesting urban councils could see spending power increase by around 20% by 2028/29, compared to just 2% in rural areas.

This reflects a continued structural imbalance, where rural councils face higher costs to deliver services across dispersed communities, yet receive less core funding. increasing reliance on council tax to sustain services.

Kerry Booth, Chief Executive, Rural Services Network Rural residents are being asked to continue to pay more while receiving less. That is not a fair or sustainable position. The current funding approach does not fully recognise the additional costs of delivering services in rural areas, and without reform, these disparities will continue to grow. Every resident, in every place, deserves a fair deal, and that must be reflected in how funding is allocated.

Read the full findings of CIPA’s Council Tax Survey here