Close the Student Council Tax Gap
Help our campaign to get the Government to fully refund Councils for the costs of the Student Council Tax exemption
Full time students in England are exempt from paying Council Tax - which seems fair to them when they are paying for their education and living expenses at university.
Cllr James Coles and Cllr Peter Allen decided to investigate the impact of this national policy on Newcastle City Council's finances. They discovered that the Government has not been fully compensating local council’s, like Newcastle, for this policy through the grant funding formula. Instead of updating the formula each year to reflect rising student numbers and rising Council Tax rates, the amount of compensation paid to each Council is based on the position in 2012. In Newcastle, the impact in 2024/5 was that the Council faced a £21.3 million gap - this is more than the cuts made in the Council’s budget this year.
Peter and James approached their Lib Dem colleague Lord Shipley, who took up this issue in Parliament. In response to Lord Shipley's Parliamentary Question, a Government Minister has said that they will be looking at this issue in the consultation around the Government’s Spending Review which was announced earlier in June.
It is therefore important that Councils press this issue with Ministers as part of the consultation. So, Peter and James will propose a motion on this Student Council Tax Gap to the Newcastle City Council meeting on Wednesday 9 July. They will ask the Council to work with other local authorities and other interested partners to lobby the Government to ensure that the changes implemented by Government fully compensate Council’s for this policy.
Please sign up to the campaign to help us press the Government to make the changes needed.
Close the Student Council Tax Gap
Students in full time education are exempt from paying Council Tax. The Government's formula for calculating the grant paid to Councils to compensate for this policy is based on data frozen in 2012. The impact is that Councils face a funding gap - in Newcastle this was £21.8 million in 2024/25. Please support the Liberal Democrats' campaign to lobby Government to close the Student Council Tax Gap.