Council taxes to rise by three times inflation rate

Council taxes in England are set to rise by nearly three times the rate of inflation, or £56 for an average home, according to figures released by the Government yesterday.

Council taxes in England are set to rise by nearly three times the rate of inflation, or £56 for an average home, according to figures released by the Government yesterday.

Hilary Armstrong, the Local Government Minister, claimed that no council should put their bills up by more than 4.5 per cent next year, but Treasury figures show an average rise of 7 per cent is more likely.

The opposition parties seized on the settlement as proof that hard-pressed town halls will be forced to push up council taxes and cut services.

The Liberal Democrats pointed out that under the Treasury's own figures councils will be more than £1.7bn short of the funds required to maintain existing services and will have to raise bills by 7 per cent to make ends meet.

An average Band D home, worth between £66,000 and £88,000, would see its bill go up next April by £56. If such figures were replicated across the country, Liverpool, the most expensive borough, would see its council tax soar to £1,252. Westminster, the cheapest borough, would have a tax of £374.

Announcing the settlement in the House of Commons, Ms Armstrong said that support from Government grant and business rates would rise by 5.5 per cent in 2000-2001. It will be set at £41.8bn - an increase of £2.2bn. She said that the settlement allowed for three years of "substantial growth" in government funding for local authorities. "It was, and remains, the best settlement for local government since the introduction of council tax," she said. However, Ms Armstrong pointed out that bill rises had dropped from 8.6 per cent to 6.8 per cent last year and urged councils to exercise restraint. "Excessive council tax increases" would attract capping, she warned.

Tory spokesman Nigel Waterson said that the announcement further undermined local government and local choices. "The average Band D household is now paying £100 a year more in council tax than they were when this Government took office," he said.

"If you are a council, especially a rural one, being treated unfairly in year one, it is no consolation at all to be told by ministers that you will continue to be treated just as unfairly in years two and three. It means a three-year prison term for rural communities with no escape or time off for good behaviour."

Adrian Sanders, the party's local government spokesman, said that the squeeze on councils had even forced many of them to increase burial charges as one of the few ways of raising cash left to them.

"The Government should get its tanks off town hall lawns and allow local communities to set their own priorities without the fear of capping," he said.