Council tax bills to rise again

Council tax bills are set to rise by more than double the rate of inflation, according to a new survey.

About 75 per cent of councils in England are said to be ready to defy government attempts to limit their spending increases to five per cent.

Some 56 councils have already been issued with official warning letters from Whitehall.

And Tony Blair's official spokesman today repeated the Government's warning that ministers stand ready to cap high-charging councils.

He added: "Given the significant extra investment in local government, it is the Government's firm view that local authorities can and should be able to deliver increases in low single figures. Competing priorities are not in themselves an excuse for imposing higher and higher taxes willy-nilly."

Council tax bills rose by 12.9 per cent last year, and by 18 per cent in London, where a typical household now pays more than £1,000.

This has prompted Nick Raynsford, the local government minister, to threaten to curb "excessive" rises.

Seven London boroughs are understood to have received warning letters from him instructing them to trim their spending plans. These are Islington, Barnet, Enfield, Hammersmith and Fulham, Kingston, Newham and Redbridge.

Mayor Ken Livingstone has not received a warning, though he has proposed a 9.9 per cent increase in his share of London bills, adding £23 to an average bill.

Today's survey reveals that three-quarters of county and unitary councils, such as London boroughs, plan to increase their share of the bills by five per cent or more..

Despite being promised extra funds from Whitehall, councils say they will struggle to balance their books, because so much of the increase can only be spent on schools.

This forces them to make cutbacks in other areas, such as environment and leisure, and impose inflation-busting increases. Councils are also facing pressure to spend more on social services because of their ageing populations.

Sir Jeremy Beecham, Labour chairman of the Local Government Association, said he was "not surprised" at the findings of the survey by Local Government Chronicle magazine.

"No one in local government is not mindful of the need to keep council tax down as far as possible, but that must be consistent with meeting their obligations," he said.

Islington leader Steve Hitchins said he was " surprised and disappointed" to be warned about spending. He said an increase of between five and seven per cent was likely.

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