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Real-terms cut in Council Tax for fourth year

New official figures show that the average Council Tax bill in England has fallen in real-terms for the fourth year, as almost two-thirds of town halls have taken up the government’s freeze offer, Local Government Secretary Eric Pickles announced today (26 March 2014).

National statistics released today reveal that the average band D Council Tax level from this April to be £1,468, or a change of just 0.9%, 1 of the lowest changes ever and a cut in real-terms. In London, Council Tax bills have fallen in cash terms by 0.4%.

By comparison, in Wales, which has not used Barnett funding to make a similar freeze offer, average bills are rising by twice the rate of inflation.

Since 2010, the government has worked with local authorities to reduce Council Tax. This has cut average bills in England over 4 years by over 11% in real-terms. In contrast the period between 1997 and 2010 saw Council Tax increase in real-terms by 47%. This doubled a typical band D bill to a £120 a month.

The coalition government has provided funding for an unprecedented 5 years of Council Tax freezes worth potentially up to £1,075 for an average band D home over the lifetime of this Parliament.

Mr Pickles also praised those councils that froze or reduced their bills for understanding the importance of keeping tax bills down and for giving families greater financial security.

In total 251, or 60%, of local authorities signed up to the government offer to freeze Council Tax for 2014 to 2015. This is roughly the same as last year. The government has also handed local residents new rights to veto any excessive local tax hikes through a referendum. No council chose to put an increase to a local referendum.

Residents are also now able to pay their bill over 12 months rather than 10 to help spread the cost. From April, a new national Council Tax discount for family annexes also comes into effect, designed to support extended families and remove an unfair penalty tax surcharge on annexes.

Local Government Secretary Eric Pickles said:

“In the last decade, Council Tax bills went through the roof. This government has been working to keep Council Tax down, giving hard-working people greater financial security.

“We have given extra government funding to town halls to help freeze Council Tax, which has cut bills by more than 11% in real-terms.

“This means people have more in their pocket, and are no longer facing the threat of soaring bills.”

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