Bristol Lib Dems Call for Fairer Funding for Council Tax Exemptions

Bristol Liberal Democrats have urged the Government to reform how Council Tax exemptions are taken into account when deciding how to fund local government, as the cost of student exemptions in Bristol reach £25 million.

At this week’s Full Council, Cllr Andrew Brown (Liberal Democrat, Hengrove and Whitchurch Park) moved a motion calling for the Government to update the local government funding formula to reflect the growing number of student-only properties that are exempt from Council Tax in the city.

In 2013, Bristol had nearly 6,000 properties that qualified for student exemptions, totalling £8.7 million. By 2024/25, that number had nearly doubled to over 11,000 properties, with exemptions totalling £22.8 million. Next year, the figure is expected to rise again to £25.2 million.

Despite the large growth in the number of student exemptions, the formula used by the Government to determine how much funding councils should receive has been stuck using student numbers from 2013 when considering how the exemptions should be factored in. With student numbers having grown considerably and the cost to the council for providing essential services ever increasing, the council has been left to absorb the growing shortfall.

Cllr Brown said “Students should rightly receive Council Tax exemptions to help with accommodation costs, but it’s not fair that cities like Bristol are left to pick up the tab without proper support from the Government. The funding formula hasn’t kept pace with reality, and that’s putting additional pressure on local services.

“With the value of these exemptions expecting to total £25m next year, redressing the issue of this funding would go a long way to reducing the pressure on the council’s books.”

 “This is about fairness and the Government stepping up to properly fund local government. Students should continue to benefit from these exemptions as per national policy, but the Government must ensure that councils aren’t penalised for simply having large student populations. We need a funding system that uses today’s student numbers, not those from over a decade ago.”

The motion called on the Leader of the Council to write to the Government demanding that future funding assessments fully reflect the cost of student exemptions with up-to-date figures, and to work with other Core Cities and the Local Government Association to push for this change. This comes as the Government considers the Fair Funding Review 2.0, which is set to reshape local government funding.

Notes to editors:

• Council papers: ModernGov - bristol.gov.uk
• Source for the £20.8m budget gap for 2026/27: Consultation or engagement
• Fairer Funding Review 2.0 information: The Fair Funding Review 2.0 - GOV.UK