Councils in England 'plan slight rise' in council tax

Many local authorities are rejecting government incentives to freeze council tax

Councils in England are planning an average council tax increase this year of 0.6%, according to a survey.

That will take the average bill for a band D property to £1,464 in 2014/15 - a rise of £8.47.

The annual survey was carried out by the Chartered Institute of Public Finance and Accountancy (CIPFA).

Communities Secretary Eric Pickles said the government had "worked with councils to freeze council tax", and had cut it in real terms.

The biggest increase will occur in the South East outside London, where average council tax is set to go up by 0.8%, or £11.35.

In London, the average bill will fall by £5.39.

CIPFA suggests the average fall in London is linked to local elections in the capital's boroughs this May, with councillors reluctant to stand on a record of tax increases.

Council taxpayers in Scotland will see no increase again this year, as bills have been frozen since 2007.

No figures are available yet for Welsh councils, but observers say the increases in Wales are likely to be bigger than those in England.

Freezing council tax has been an important policy objective for ministers at Westminster. This year Whitehall is providing a share of £550 million in extra grants to English local authorities that keep bills the same as last year.

But CIPFA says 43% of councils are this year planning to reject the government's offer and increase council tax - a slightly bigger percentage than the proportion rejecting a freeze last year.

Communities Secretary Eric Pickles said council tax "more than doubled" under Labour

Ministers cannot order local authorities to hold council tax down. But they can provide financial incentives. Any authority wanting to increase bills by more than 2% will also have to put their plans to a local referendum.

Many local authorities have argued that freezing council tax is becoming more difficult at a time when other funding sources are increasingly stretched.

'Unprecedented austerity'

But there is also very little appetite to put a tax increase to a local vote, which most authorities think they would lose.

So many councils in England that have decided to increase bills are planning a rise of just under the government's referendum threshold - such as 1.99%.

Rob Whiteman, CIPFA chief executive, said "As the pressure from this period of unprecedented austerity has intensified, all councils are having to make increasingly difficult decisions to balance protecting hard-pressed taxpayers and maintaining local services."

Responding to the survey, Communities Secretary Eric Pickles said: "Under Labour, council tax more than doubled, pushing the typical bill to £120 a month on a band D home, making it increasingly difficult for hard working people to balance family budgets.

"By contrast, this government has worked with councils to freeze council tax. We have cut council tax in real terms, giving families greater financial security."