Unpaid council tax arrears soar to record £7.4billion as cost of living spirals out of control under Labour

Published: 21:49 EDT, 24 October 2026 | Updated: 22:32 EDT, 24 October 2026 Unpaid council tax bill arrears have soared to a record £7.4billion as families struggling with the cost of living are hit with hikes of up to nine per cent.Council tax arrears have risen a staggering £782million in the last year, according to figures revealed by the Centre for Social Justice.The increase will put pressure on the Chancellor, John Healey, to find ways of stemming the spiralling cost of living when he introduces his maiden budget on October 28.Households are now at risk of another spike in their bills after council tax band D homes saw an increase of £111, up to £2,392 in April alone.Significantly larger rises were imposed by local authorities such as Trafford who increased charges by 7.49 per cent and Worcestershire County Council who hiked their council tax by 8.98 per cent.Shadow housing minister Gareth Bacon said: 'Council tax is spiralling out of control under Labour, with families facing ever-rising bills. 'It is little wonder that more and more people are struggling to pay. Hardworking people are dealing with rising prices, rising energy bills and rising costs at the pump, yet all Labour can offer is tax, tax, tax. 'They are hiking up ordinary people's council tax and adding extra costs on top through their new family homes tax.' Andy Burnham and John Healey pictured together on day two of the Labour Party ConferenceMeanwhile household gas and electricity bills have also risen in the UK by four per cent this month adding an additional £60 in costs.They are predicted to rise yet again to 16 per cent, which would add another £276 in household costs by January 2027. It comes after Mr Healey is expected to unveil plans for an extra £70billion borrowing binge to pay for surging debt interest and welfare costs, according to City experts.They warned the Chancellor is set to duck big spending decisions on defence, benefits and social care in his maiden budget on Wednesday but hit banks and gambling firms with higher taxes instead.He has also vowed to give households and firms 'breathing space' by cutting VAT on electricity bills and freezing fuel duty.But to balance the books, Mr Healey will have to borrow tens of billions more than the Office for Budget Responsibility (OBR), the official forecaster, pencilled in just seven months ago.As part of his Budget announcement, Mr Healey is expected to commit hundreds of millions of pounds in next week's Budget to AI as the Government plans to develop a 'distinctively British approach' to the powerful technology.His £600million package will aim to guard against the risks of AI while aiming to harness its power for economic advantage across the UK.He said AI would 'transform daily life' and 'every firm, community, hospital, school and every aspect of our economy' could benefit from the technology.Andy Burnham is also set to receive £7million of taxpayer cash into looking at how the Olympic Games could be brought to the north of England.The hefty sum will be spent on a full feasibility study to look at winning the Games for the north in the 2040s.It will consider venues and transport links, which cities could share the games, how communities could benefit, how much it will all cost and whether any bid stands a chance.The Department for Housing, Communities and Local Government has been approached for comment. Do YOU have a story? Email Joshua.Haining@dailymail.co.uk