Details of grants to councils that agree to freeze or reduce council tax have been published.

Councils that freeze or reduce their council tax next year will get a one off grant equivalent to raising their council tax by 2.5 per cent. Police and fire and rescue authorities will get a 3 per cent equivalent, with the Greater London Authority and the City of London getting intermediate offers. The new voluntary scheme will be open to the same councils as last year.

The new scheme would mean that local taxpayers living in an average Band D home in England could once again save up to £72 compared to a 5 per cent rise in council tax on top of this year’s council tax saving of up to £72.

Council tax bills hit £1,439 on Band D in England in 2010-11. This year, 2011-12, the average Band D bill set by local authorities remained at £1,439. In London it was £1,308; in metropolitan areas it was £1,399; and in shire areas it was £1,484. Council tax was £688 in 1997-98. This means council tax has risen over one hundred per cent – or an extra £751 a year on a Band D home. Since all other Bands are set as a percentage of Band D, homes in every band have seen their bills double.

The scheme for 2012-13 will comprise a one-off payment of grant, which is payable for one year only. The Localism Act, which has now received Royal Assent, gives the public the right to veto excessive council tax rises. Councils that set council tax increase above a ceiling approved by Parliament each year would automatically trigger a referendum of all registered local electors in their area.