With the Chancellor set to unveil his Budget tomorrow, local council leaders are warning that council taxpayers face a 1.5 billion pound bill over the next three years if the Government fails to meet its promise to return money raised from landfill tax to town halls. The Local Government Association says households will have to pay 70 pounds each and more than 80 council leaders have signed a letter calling for the pledge to be fulfilled.

The letter has gone to the Environment Secretary, Hilary Benn, demanding that money raised through landfill tax is reinvested in refuse and recycling facilities. At the moment local authorities have to pay 32 pounds a tonne in tax for rubbish sent to landfill. That is set to rise to 48 pounds a tonne by 2010. On top of that, from 2010 councils will face European Union fines of 150 for every tonne of dumped rubbish and it is estimated those fines could total 200 million pounds by 2013.

Paul Bettison, who chairs the Environment Board, said it was unacceptable that the Government should backtrack on its promise to give the landfill money back to councils. “To stop council tax bills rising in the future, ministers must make good on their pledge to reimburse the billions of pounds that councils pay for landfilling rubbish,” he said. So far, he added, the Government had failed to demonstrate clearly how the money was being given back to authorities.

“Landfill tax is designed to encourage people to throw away less but at the moment it’s unfairly penalising hard-pressed councils that need the money to build more recycling plants,” Councillor Bettison said.