Council Tax titbit

Gordon Brown's thrown more money at local government; enough to limit council tax rises to around 5% for the coming year. Mind you at 'only' 5%, council tax is still rising twice as fast as the general rate of inflation! The average council tax bill will still rise by around £50 a year. In all, a total of £1.1 billion extra has been offered to local authorities. Councils will receive £305 million in 2006-07 and £508 million in 2007-08.

Three weeks before the Pre-Budget Report, the Local Government Association had warned that councils were facing a £2.2 billion black hole and that council tax next year would likely rise by at least 10%.

However, the extra funding, together with pledges of £800 million from other government departments to cover new responsibilities, including licensing, child protection, EU waste regulations and asylum seekers, has helped hold prospective tax increases down.

Excluding schools grants, local authority budgets will rise by 3% next year and 3.8% the year after. Local government minister Phil Woolas has already suggested that the government would look to cap any increases in council tax over and above 5%. He said, "High council tax increases are a thing of the past, and we will not tolerate excessive council tax increases either next year or in years to come."

Back to Pre-Budget 2005