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Since the 2012-13 financial year, local authorities, fire authorities, and Police and Crime Commissioners have been required to determine whether the amount of council tax they plan to raise is ‘excessive’. A set of principles defined by the Secretary of State, and approved by the House of Commons, is used by authorities to decide if the amount to be raised is excessive. Any authority proposing an excessive increase in council tax must hold a local referendum and obtain a ‘yes’ vote before implementing the increase. An authority proposing an excessive increase must also make substitute calculations, based on a non-excessive council tax level. This takes effect if the excessive increase is rejected in the referendum.

Proposed thresholds have been published for the 2020-21 financial year, but these are not certain at the time of writing due to the snap December 2019 General Election. The normal pattern is for the House of Commons to consider the principles twice, in draft in December and a final version in February in advance of the new financial year in April. This timetable is likely to be different in 2019-20, as polling day has been set for 12 December 2019.

Authorities must raise less than the threshold to avoid a referendum. In 2019-20, the thresholds were 3% or £5.00 on a band D bill for district councils; 3% for fire and rescue authorities and the GLA; and £12 on a band D bill for Police and Crime Commissioners. Local authorities with social care responsibilities (county and unitary authorities) faced a total threshold of 6%. Of this, 3% is available for adult social care and 3% for general spending. As in previous years, no principles were applied to parish and town councils.

Referendums must be organised by billing authorities and there is provision for recovery of expenses where the referendum is held on behalf of a precepting authority. Rules for the conduct of referendums have been set out in regulations.

One referendum has taken place to date. The Bedfordshire Police and Crime Commissioner, Olly Martins, proposed a 15.8% increase in council tax for 2015-16. The poll was held on 7 May 2015. 91,086 voters (30.5%) supported the proposal, whilst 207,551 (69.5%) opposed it. Surrey County Council proposed to hold a referendum on a 15% increase in council tax for 2017-18, but later dropped the proposal.

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