The Treasury has set aside an extra £650 million to help local authorities in England freeze their council tax next year, meaning local taxpayers living in an average Band D home in England could save up to £70.
Council tax has more than doubled since 1997 and Ministers believe that a freeze will offer real help to hard working families and those on fixed incomes, such as pensioners. Scotland has benefited from a council tax freeze for a number of years without adversely affecting frontline services. During the period that Scotland has had a freeze in place the average bill in England has risen, so that an equivalent Band D home now pays £290 a year more than that north of the border.
The new grant scheme will be open to all billing and major precepting authorities, including police and fire authorities, which decide to freeze or reduce their council tax next year. If they do, they will receive additional funding in 2011-12, equivalent to raising their 2010-11 council tax by 2.5 per cent. The Spending Review also commits to providing authorities with additional funding in future years to "lock in" the benefits of the one year freeze and help ensure council taxpayers will not face subsequent excessive increases.
The news of funding for a council tax freeze comes ahead of Government plans to legislate in the next month’s Localism Bill to give local residents new powers to veto excessive council tax rises that will replace Whitehall capping from 2012-13 onwards. Until then the Secretary of State is clear he reserves the right to use capping powers against any individual authorities which ignore the freeze and set excessive council tax increases.
Ministers have already confirmed there will not be any council tax revaluation in England, which could have resulted in some households facing hefty tax increases from moving up council tax bands. Four times as many homes moved up one or more bands than down in the 2005 council tax revaluation in Wales.
Communities and Local Government Secretary of State, Eric Pickles, said:
"Hard working families and pensioners have seen their council tax bills more than double since 1997. But the new Government is standing up for hard-pressed local residents, providing special funding to help councils freeze their bills next year. Further financial freedoms announced for councils will mean they can better protect frontline services like rubbish collections and care for the elderly.
"The new Government has already stopped the council tax revaluation which would have lead to higher council tax bills over this Parliament for many families. And we will give local residents a new power to veto excessive council tax rises in the future, to protect the interests of local communities and strengthen local democracy."
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