Average council tax bills will drop marginally by 35p next year as authorities take up the Government’s offer of a freeze for one year.
Under the policy, all councils that reduce their council tax rise to 2.5 per cent will be reimbursed by the same amount by the Government, allowing them to freeze household bills.
An analysis by the Chartered Institute of Public Finance and Accountancy shows that bills on average will fall a tiny amount because some councils have decided to cut their tax levels.
However the freeze – which will cost the Treasury £2.5 billion – has prevented authorities from raising extra income to offset public spending cuts.
Local government experts are warning that unless the policy is repeated in future years authorities are likely to raise council tax significantly.
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The Conservatives pointed out yesterday that council tax doubled under Labour to a record £1,439 for an average Band D home late April.
“The new Government has frozen council tax, saving hard-working families and pensioners up to £72 a year,” Eric Pickles, the Communities Secretary, said.