COUNCIL tax bills will increase by more than twice the level of inflation this year with town halls giving warning of even steeper rises in 2006.
A Times survey has revealed that average bills will increase by 4.4 per cent — equivalent to about £45 a year on the benchmark band D property.
Yesterday ministers hailed the expected rise, which will take effect just before the general election, as the lowest for more than a decade.
But council leaders argued that they had curbed rises because of a one-off “pre-election bribe” and threats that they would be capped. The 34 county councils which have elections this May came in with the lowest rises.
Many authorities said that their reserves had run dry and they would have to push up council tax next year unless the Government allocated extra cash for 2006-07. In the following year many householders face another rise under current plans to revalue homes and set new bands.
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The Times survey of 200 councils shows that the average proposed rise across all types of authorities is 4.4 per cent with most councils planning rises of between 3 and 5 per cent. The London Borough of Havering which is proposing a rise of 3.3 per cent will have the largest band D council tax in the country at £1,576.
Twelve rebel councils have decided to defy the Government by setting increases of between 5 and 100 per cent. South Cambridgeshire last night said that it would risk being capped and stick with its proposed 100 per cent increase after three years of freezing its council tax levels.
Tony Travers, a local government expert at the London School of Economics, said that the homogenous picture smacked of a national tax and went against Labour’s plans for devolved government.
“Councils have been browbeaten by the Government into doing exactly what ministers wanted. With an election this year Labour will be pleased but there is no evidence of local democracy,” Mr Travers said. He also gave warning of higher taxes next year. “This is just another sticking plaster — a blip downwards. Next year taxes will go up again.”
Nick Raynsford, Local Government Minister, who has written to 27 authorities warning them to revise their totals, told The Times last night that he would go ahead with capping again this year. He also pointed out that most of the rebels were Tory authorities which he suggested were making a political point. “It does appear rather striking that Tory-controlled districts are most at risk of being capped.”
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Mr Raynsford said that the proposed tax rises, which tally with the Government’s own research, were the lowest for a decade. Gordon Brown’s decision to raid £512 million from other Whitehall departments to add to local authority grants in December had paid off.
Caroline Spelman, Tory spokesman for local government, said: “Mr Blair claimed that he had ‘no plans to increase tax at all’. But council tax has soared by 70 per cent since 1997, and is just one of the 66 stealth taxes Labour have heaped on hardworking people. These latest rises are double the rate of inflation — and it is clear Labour are planning to drive them up even further if elected to a third term in office.”
Ed Davey, the Liberal Democrat local government spokesman, said: “Council tax has been artifically suppressed by a pre-electoral concoction of bribery and bullying.” The “bribery” came in the form of an extra £1 billion given to councils this year, with no guarantee that this would be repeated next year. The “bullying” came in the form of a threat to cap councils that introduced an increase of more than 5 per cent, Mr Davey said.
Sir Sandy Bruce-Lockhart, chairman of the Local Government Assocation, said that councils had done their best to bring down levels this year but added: “Much of the funding this year is a one-off grant and ministers have said it will not be repeated which makes rises inevitable next year unless the Treasury fills the black hole.”
This year’s expected average rise is lower than last year’s and about a third of the massive 12.9 per cent rise in 2004-05 when council tax rose swiftly up the political agenda.
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With an additional £500 million reallocated from within council budgets, most authorities will have enough to cover pension debts and the extra costs of taking on the responsibility for licensing pubs and restaurants. Most councils also admitted that threats to cap authorities which set rises more than 5 per cent had influenced their budget-making decisions.