Council tax bills to rise by 4 per cent

Local authority leaders renewed warnings of service cuts today as a survey confirmed council tax bills are set to rise by around four per cent.

Research by public accountancy institute Cipfa found the average Band D home would face a £52 a year increase to £1,370.

It said the 3.9 per cent figure, revealed in the survey carried out for The Times and BBC Radio 4's Today programme, was the lowest for 14 years.

But the Local Government Association said it had only been kept that low through "difficult decisions" over services and demanded a funding reform to recognise modern budget pressures.

Chairman Sir Simon Milton said: "It is a testament to the determination of councils that the average rise is likely to be close to the rate of inflation.

"Keeping council tax down has been made harder by several government departments shifting extra costs on to councils whilst limiting funding from central government to a real terms 1% increase.

"Council tax would have been a lot lower with a more realistic central government grant.

"The toughest financial settlement in a decade has left councils with difficult decisions to make locally."

Ministers have threatened to use capping powers against councils imposing "excessive" rises over the Government's per cent ceiling and insist town halls were given a "fair and affordable" financial settlement.