Headlines: March 28th, 2006

Two local authorities are facing capping measures after the announcement that the average council tax increase for band D properties will be four and a half per cent. The authorities that have been designated with a view to in-year capping are York City Council and Medway Borough Council. They now have 21 days in which to respond after which the Government can either set a maximum budget for the year ahead or withdraw the designation and restrict future increases.Local Government Minister Phil Woolas said the majority of authorities had responded positively to the message from central government. “The achievement of another historically low increase is a tribute to the way in which local authorities have contained their costs and budgeted prudently,” he said. Mr. Woolas said the average increase for the coming year would have been 4.2 per cent but was higher because of the council tax element of the funding package for the 2012 Olympics that affects London.

The Chairman of the Local Government Association, Sir Sandy Bruce-Lockhart, said the rise was higher than councils themselves would have wanted. Authorities were championing the interests of local people and doing all they could to keep down tax bills. He said the money given by the government to most councils was better than first proposed but it had still left more than half of the authorities that had social services responsibilities with a grant increase of two per cent or less.

“The settlement included no funding for demographic change such as the increasing number of vulnerable elderly people and more people with mental and physical disabilities requiring care and this will lead to reductions in some services,” he warned. Sir Sandy was also concerned about examples of cost cutting by the National Health Service through moving people out of hospital too early and into local council social care.

Figures show the average council tax set by English local authorities for a Band D property occupied by two adults and including parish council precepts will be 1,268 pounds compared with 1,214 in 2005-06. Average council tax bills per dwelling in England will be 1,056 pounds.