Council tax rises 'lowest for a decade'

Average council tax bill will rise 4%

Thursday, 27, Mar 2008 12:00

The average council tax bill will rise by the lowest amount for more than a decade, the government announced today.

Local government minister John Healey said the average bill for a band D property will increase by four per cent.

Households in 18 local authorities will avoid council tax rises entirely.

Across the country, 265 local authorities will introduce tax rises below inflation as measured by the retail price index (currently at 4.1 per cent) and 69 per cent will beat consumer price index inflation (2.5 per cent).

Ministers have ordered councils to restrict rises to "substantially" below five per cent.

The Department for Communities and Local Government (DCLG) argued today's four per cent average was enabled by 11 years of above-inflation grant increases from central government.

Mr Healey commented: "Our commitment to take action combined with our 45 per cent above inflation increase in government grant for local services up to 2010-11 has helped bring down council tax rises to a 14-year low, and most councils have contained their costs and budgeted prudently."

The Local Government Association (LGA) said the increase was the lowest council tax rise in a decade and demonstrated local authorities' determination to provide a better deal for taxpayers.

But Sir Steven Miltion, chair of the LGA, said the situation would get tougher over the next few years.

"Councils have been under a real financial squeeze during the annual struggle to keep bills down," he said.

"The stark reality is that low council tax rises have come at a cost and many councils have had to make tough decision on spending."

Sir Steven said councils had also been hit by government departments shifting costs on to councils.

He warned there were particular pressures for local authorities that provide social care, as well as concerns about government funding for free national pensioner and disabled bus travel.

Help the Aged said, while the average increase is not a shock, the actual amount payable on the average band D house (£1,374) is still a "considerable weight to bear".

The charity has renewed calls for the government and local authorities to increase uptake of council tax benefit, having found only 54 per cent of eligible older people claim it.