Council tax set for 4pc rise

Council tax bills in England look set to rise by four per cent this year, according to research out today.

It means the average council tax bill per household will be around £1,145 in 2008-09 – an extra 85 pence a week.

The average increase is based on a survey carried out by the Local Government Association (LGA) involving more than 100 councils, including Staffordshire and Shropshire.

It said draft budgets disclosed by them all reveal that inadequate government funding is forcing many councils to make massive efforts to keep council tax rises below five per cent.

The LGA, which represents all the councils in the country, said the growing influx of foreign immigrants was an additional pressure on budgets, with councils finding themselves "shortchanged" and "poorly equipped" to deal with the underestimated numbers.

And it warned funding problems were likely to deepen in the next two years with lower anticipated increases in government grant from 2009 to 2011.

Staffordshire has predicted an average increase of four per cent, while council chiefs in Shropshire expect bills to go up by 4.4 per cent.

The LGA renewed calls for a shake-up of the council tax system that would make local authorities less reliant on government grant.

Around 75 per cent of all council funding comes from central government, with just a quarter of town hall budgets coming from money raised by council tax.

Sir Simon Milton, chairman of the LGA, said the toughest financial settlement in a decade had left councils with difficult decisions to make locally, but enormous efforts were being made to keep bills down.

"Keeping council tax down has been made harder by several government departments shifting extra costs onto councils whilst limiting funding from central government.

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

Stafford Council's tax rise has been set at 3.9 per cent, while Lichfield District Council has estimated a council tax rise of around four per cent.

Cannock Chase District Council could not provide an estimate.