Council tax rise set to be three times rate of inflation

Published 20th Jan 2009

Council tax bills are expected to rise by an average 3.5 per cent across England in April, more than three times the predicted rate of inflation, town hall chiefs admit today.

The twelfth successive rise over inflation is said to be due to an increased demand for services and a £2.5 billion drop in income, thanks to the falling property market and a lower return on investments.

Council tax has doubled since Labour came to power. The annual rises and soaring electricity and gas prices mean that the average family is paying more than £3,000 a year in household bills.

The figures are still being finalised but the survey from the Local Government Association (LGA) suggests that the average Band D council tax bill will rise by £47 from £1,374 to £1,421.

The regional breakdown of the LGA shows that most areas are expecting council tax increases of between 3.5 and 4 per cent in April, with the highest rises expected in the Midlands and the lowest in London. Boris Johnson, the Mayor of London, and the Conservative councils in the capital have kept the average figure down by planning increases of only 1.2 per cent.

Hammersmith & Fulham council has proposed a 3 per cent cut in council tax and Kensington & Chelsea is offering £50 subsidies, equal to a freeze across the board. Conservatives control fourteen of the thirty-two London boroughs, while Labour holds seven and the Liberal Democrats four.

Last month Mr Johnson decided to freeze the capital's precept — the element of council tax spent on city-wide services such as police and transport — for the first time in eight years.

John Healey, the Local Government Minister, said yesterday that council spending would be capped if taxes were raised by more than 5 per cent. “There can be no excuse for cuts in services or excessive rises in council tax, and ministers stand ready to take tough capping action if needed to protect council taxpayers,” he said.

Source: ' Times '

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