Council tax bills up 4%

Average council tax bills in England and Wales are due to rise four per cent in the coming year - a touch below current retail price inflation.

The Department for Communities and Local Government (CLG) claims this represents the lowest increase in the tax for some 14 years.

Government figures show, while the average Band D increase in England will be four per cent, some 265 (58 per cent) authorities will have increases below the 4.1 per cent Retail Price Index (RPI).

Furthermore, 69 local authorities (15 per cent) will see increases below the 2.5 per cent Consumer Price Index (CPI), 18 (four per cent) have no increase and three (0.66 per cent) are reducing council tax bills.

"We have delivered the first ever three year financial settlement for local government, and are moving over £5bn into budgets with no spending strings attached placing financial decisions increasingly in their own hands, and the vast majority have responded well," explained minister for local government, John Healey.

"Our commitment to take action combined with our 45 per cent above inflation increase in government grant for local services up to 2010-2011 has helped bring down council tax rises to a fourteen year low, and most councils have contained their costs and budgeted prudently."

However, despite government optimism, council tax levels have been relentlessly increasing in recent years - peaking with a 12.9 per cent jump in 2003/04.

Just nine years ago, in 1999-00, the average band D charge in England was just £798.

"The cost of living is going through the roof under Labour, and this latest round of council tax hikes will mean falling disposable incomes for working families and pensioners," argued the Tory local government spokesman, Eric Pickles.

Following the increase the average bill for a band D house will increase from £1,321 to £1,374 a year.

In Scotland meanwhile the Scottish Government has provided cash to freeze all council tax bills.

John Swinney, cabinet secretary for finance, said: "People across Scotland will benefit from the extra £70 million investment in councils approved by Parliament today.

"Each council has already decided to either freeze - or in the case of Stirling - cut council tax, providing much needed relief for householders at a time of rising food and fuel bills."