Tax rises will fund schools

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The Independent Online
TOWN halls have had to raise council taxes by more than twice the rate of inflation in order to pay for ministerial pledges on school funds, according to a comprehensive survey of local government spending plans.

With all councils now having set next year's budgets, a survey printed in tomorrow's Public Finance magazine says the average rise in tax for Band D properties (which covers homes worth between pounds 68,001 and pounds 88,000) will be 6.2 per cent to pounds 647.68 for the next financial year.

At 7.1 per cent, London taxpayers face the largest rise in England to a Band D average of pounds 619.26. Taxpayers in other big cities face an average rise of 6.7 per cent to pounds 726.76.

The average increases mask huge variations countrywide. At pounds 295, the London Borough of Westminster has again set the lowest Band D tax. Liverpool City Council has again set the highest, taking Band D to pounds 1006.46. As a result taxpayers in a house worth pounds 320,000 in Westminster are paying less than the Liverpool taxpayer in a house worth less than pounds 40,000.

Bills in the rest of England will rise by 5.9 per cent to pounds 631.34. In Wales a 17.6 per cent average increase, taking the average Band D bill to pounds 471. 77. In Scotland bills will go up by 13.4 per cent to a new Band D average of pounds 708.

Research by the Association of Metropolitan Authorities suggest councils will pump the additional monies into schools. Councils had warned governors earlier this year that they may face, in real terms, reductions in budgets despite the extra pounds 774m allocated to education in November's Budget. They could not afford to make any more available.

But with local elections seven weeks away, and ministers ready to attack councils which fail to pass on the 4.5 per cent increase, authorities have had little option but to find the money.

The AMA said figures indicated that authorities were cutting funding for support services, such as school milk and meals, or taking money from other services or from reserves.