Average household council tax rise ‘lowest ever’

The first ever three-year local government funding settlement giving councils an extra £8.9billion, including 4.2% more next year, is helping authorities to plan ahead and better manage the pressures their communities face, the Government said.

Planned efficiency savings over the settlement period are expected to reach £4.9billion.

The Government has been clear it expected an average council tax increase substantially below 5% next year. The vast majority of local authorities have complied, with 23 councils, excluding their parish precepts, actually freezing or reducing council tax.

However, Healey also announced that Surrey and Derbyshire Police Authorities had set excessive increases that were "designated" for capping action. They now have 21 days to make their case to the Government.

Derbyshire Police Authority has set its budget increase to 4.99% and its council tax to 8.68%. Last year Surrey Police Authority was capped and was set a notional budget for 2008/09, providing the basis for judging future increases. Based on those notional amounts, Surrey has set its budget increase to 4.82% and its council tax to 7.07%. This is the first time that the Government has had to take action twice against the same authority.

John Healey said: "Most councils across the country are tightening their belts, which is exactly what the public wants to see. Today’s figures show that the vast majority of local authorities have kept increases to a minimum.

"The average household council tax bill will rise by 2.6% – the lowest increase since council tax was introduced in 1993.

"An extra £8.9billion from the Government’s three year funding settlement and £4.9 billion of planned efficiency savings are helping councils maintain both high quality public services and low council tax, and for the first time ever the public now see on their bill how efficient their council is.

"With a tough economic year ahead councils will need to do even more to control costs and I remain ready to be tough with capping powers to protect council taxpayers from excessive increases."

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