Council tax in Luton is cheaper than average in England

It comes as a think tank warned the "relentless rise" of council tax was "unsustainable", and called for a complete rethink of the tax system.

New figures from the Ministry of Housing, Communities and Local Government show the council tax rate for a Band D property in Luton, excluding local parish precepts, is £1,923.62 for the current tax year.

This was a 4.99 per cent increase on the year before.

Council tax is the main source of locally raised income for many councils, with the amount payable on a property depending in part on its allocated council tax band.

Band D is the standard measure of council tax, with all other bands set as a proportion of this rate.

The council tax bill may be made up of several elements, including council tax collected for county councils, the fire and rescue authority, police and crime commissioner, combined authority, and parish or other smaller local councils.

A spokesperson for the Local Government Association said council tax was an important funding source, but is not enough to pay for all local services in the face of "significant financial pressures".

They added: "Councils need a significant change in our funding to stabilise local government finances so we can deliver the services local people want to see."

The figures show the average Band D council tax set by local authorities in England, excluding parish precepts, for 2025-26 will be £2,236, which is an increase of £106 on 2024-25.

Most councils raised tax last year, while eight froze it, and one cut it.

Legally, the most councils can raise tax by in a year is 4.99 per cent – anything higher would require consent from the voters in a referendum.

Dr George Dibb, associate director at the Institute for Public Policy Research, said it was "no surprise" so many councils had raised bills to the legal limit, saying at least £15 billion in local public assets had been sold since 2010 "just to keep essential services running".

He added: "Council tax is one of the least fair and worst designed taxes which makes its relentless rise unsustainable.

"Multimillion pound mansions in Kensington pay the same taxes as a normal semi in Stockport. In the long run, we need a fundamental rethink of this outdated and regressive system.

"A proportional property tax would lower costs for many households, reduce regional discrepancies, and still ensure councils have the funding they need."

An MHCLG spokesperson said: "We are under no illusion about the scale of financial issues facing councils we inherited and our work is underway to fix the foundations and bring long-term stability to the sector.

"And while councils are ultimately responsible for setting their own council tax levels, we have been clear that they should put taxpayers first and carefully consider the impact of their decisions.

"That’s why we are maintaining a referendum threshold on council tax rises, so taxpayers can have the final say and be protected from excessive increases."