South to Subsidise The North: Proposed New Council Tax Formula Set to Funnel Funds into Hartlepool....
- teessidetoday
- Jun 21
- 2 min read
As Hartlepool hopes for a tax freeze next year, its claimed southern councils will be forced to pick up the bill...
21st June 2025
Labour’s proposal to freeze council tax in Hartlepool by 2026 has reportedly taken another step forward—but not without sparking serious debate across the country.
Its claimed Deputy Prime Minister Angela Rayner is leading a bold new charge to reform how council tax is funded across the country, arguing the current system is punishing poorer communities.
Under Labour’s plan, its claimed wealthier southern areas could see their council tax bills rise sharply in order to fund services in more deprived towns and cities like Hartlepool.
The proposal's being pitched as 'a fairer system' that redistributes money according to actual need, rather than geography or property prices. Rayner says the link between funding and need has “collapsed,” and that residents in struggling areas are often paying more whilst getting less in return.
If Labour’s vision becomes reality, its claimed the way central government supports local councils by way of grant funding will be completely overhauled. A new funding formula will consider factors like local poverty levels, age demographics, and population pressures. That could mean more money travelling north—particularly into areas such as Teesside and other parts of the North East that have faced years of cuts and underinvestment.
Rayner highlighted shocking disparities in the current funding setup: where for example, a three-bedroom home in Hartlepool currently pays more council tax than a luxury mansion in Westminster.
Her argument is simple—why should struggling towns pay premium rates for second-rate services?
Under Labour’s changes, its claimed government grants will also be recalculated using a fairer baseline that assumes all councils are charging similar rates. That shift could squeeze richer boroughs, particularly in the London Boroughs and the South East, who may be forced to raise council tax by over and above the 5% national referendum limit or cut services to make up for the reduced funding.
For Labour in Hartlepool its claimed this new proposed funding formula would lead to the political group being able to implement their 2026 council tax freeze proposed to locals, whilst others warn that this literally is a "robbing Peter to pay Paul" approach that could stir resentment and division nationwide.
Whether Labours plan to reset the funding formulas for local councils is a masterstroke of social justice or a recipe for regional fallout remains to be seen—but one thing's clear: Labour's gambling big on fairness over favouritism, and towns like Hartlepool are set to be at the centre of the debate.
