City of Lincoln Council collected £850,000 less council tax than expected last year, with more residents falling into arrears. The ongoing cost of living crisis has been blamed for the reduced amount, with lower incomes meaning people are unable to pay or become exempt.
Council tax collection rates can fluctuate depending on how many homes in the district are occupied and how many residents receive council tax support. It’s expected that the final figure for 2024/25 will be £850,492 less than predicted.
However, it will be partially offset by £400,000 more than expected which was collected the previous year. A report coming before the council’s executive next week says: “The primary reasons for this deficit in year is due to the continued, lower collection rates which have been impacted by the ongoing cost of living crisis and the effect on household incomes, resulting in the subsequent increase in arrears and provision for doubtful debts.”
The tax that the authority collects is shared between the city, Lincolnshire County Council and Lincolnshire Police. The collection rate will hit the City of Lincoln Council’s budget by around £56,000 in 2025/26, with a similar impact on the police force.
Lincolnshire County Council will lose out by £288,897. The council report says it will continue to try recovering outstanding debts and will monitor the collection rates closely.
The executive will discuss this at their meeting on Monday, January 6. Council tax for the coming financial year will be set in the next few months, with most authorities across the country looking at large increases to deal with budget pressures.