Millions in Government funding to improve local communities is to be allocated to areas with some of the highest council tax bills in Britain.
Under the newly announced Pride in Place programme, backed by record £5bn investment, communities will be given new powers to seize boarded shops, save derelict pubs and block gambling and vape shops in order to revitalise their high streets.
The Government has revealed 169 areas which will receive £2m every year for a decade. A further 95 areas will receive an immediate £1.5m to upgrade public spaces with new green spaces, play areas and sports and leisure facilities, with local people deciding how funding is spent.
These local authorities include Nottingham, Bristol, Gateshead and Dorset, where locals pay some of the highest council tax in Britain.
Nottingham residents pay over 10 per cent of their annual earnings on council tax alone, where the average Band D bill is £2,656, followed by Dorset residents (£2,630). The figure drops to £2,584 in Bristol and £2,578 in Gateshead but both are also among the top 10 highest council tax bills.
The average Band D council tax set by local authorities in England for 2025-26 is £2,280, an increase of £109 on the 2024-25 figure of £2,171.
The funding boost for local authorities comes as millions face higher council tax bills after the Government granted six local authorities permission to raise the levy above the 5 per cent cap for the 2025-26 financial year.
The areas with the highest and lowest council tax in BritainA number of cash-strapped councils are also set to receive millions as part of the fund.
Bradford and Somerset, which both raised council tax above the 5 per cent cap are set to receive £2m over the next decade. Birmingham City Council, which effectively declared itself bankrupt in 2023, and raised council tax by 7.5 per cent this year, is also in line to receive up to £20m of Pride in Place funding over the next decade.
It comes as the Conservative council opposition called for the Government to effectively refinance Birmingham City Council’s debt by scrapping or reducing interest rates on the council’s Public Works Loan Board debt.
In a statement it said the council “continues to have a budget that does not balance and an asset sales programme targeting £750m, including the disposal of library buildings, public open space and other assets with cultural or heritage value”.
John Cotton, Leader of Birmingham City Council, which has been plagued by piles of rotting rubbish for months due to a prolonged bin workers’ strike, said: “[Yesterday’s] Government announcement that eight communities across Birmingham are at the front of the queue for the new Plan for Neighbourhoods Fund, is a huge boost for the people of this city.
“The previous Government failed to deliver on its promise to level up for our communities, but today’s news shows that the Labour Government is backing the people and communities of Birmingham.”
Elliot Keck, head of campaigns at the TaxPayers’ Alliance, said: “Local taxpayers already paying the top end of the council tax scale may well raise an eyebrow when they see their town hall receiving even more cash.
“Particularly when there is overlap between what additional government cash will be used for and what existing council tax money is already supposed to be funding.
“Ministers need to carefully review the finances of any local authority in line for extra resources to ensure that this policy doesn’t simply reward the profligate and wasteful.”
The Local Government Association (LGA), which earlier this year send local authority funding “still falls short of what is desperately needed”, maintains this is the case and said council could continue to increase the amount of tax they charge residents.
Council tax is just one of the ways local authorities fund services and many, including the LGA, have called for a sustainable finance model, rather than a reliance on council tax increases.
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Read MoreAn LGA spokesperson said: “Local government finances remain in a fragile position.
“Greater financial certainty and a simpler funding system are important. However, all councils remain under pressure and face having to increase council tax bills to try and protect services at the same time as making further cutbacks.“A sustainable, long-term financial model for local government must lead to all councils having adequate resources to meet growing cost and demand pressures.”
The Prime Minister said the Government was “investing in the UK’s future, by backing the true patriots that build our communities”.
Rachel Reeves said: “We’re giving local people the power to transform their hometowns. Giving them more control of how money is spent where they live.”
The Chancellor added: “This £5bn investment doesn’t just reverse decades of underinvestment in our public infrastructure – it cuts through the bureaucracy by giving local people the power to deliver the change they want to see.”
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