Council tax rates to increase by over 5%

Council tax bills are likely to increase by 5.1% in 2008/09 despite the government urging councils to keep increases substantially below this level.

Government projections for council tax receipts in the Budget report reveal that in 2007/08 a whopping £23.7 billion was raised by local authorities. And in 2008/09 this is expected to increase to £24.9 billion – an increase of 5.1%.

Although the government is not responsible for setting council tax rates, local government minister John Healey said last December that the government expects average council tax increases in England to be “substantially below 5% a year”.

At the time, Healey forecast council tax increases of 4% for 2008/09, 4.4% for 2009/10, and 4.3% for 2010/11.

The Budget report states: “Council tax increases are determined annually by local authorities, not by the government. The council tax projections are based on stylised assumptions and are not government forecasts. The council tax figures for 2008-09 onwards are based on the arithmetic average of council tax increases over the past three years.”

Christine Melsom, from council tax action group Isisfair, said: “Some local authorities are increasing council tax by as much as 11% this year, which is simply too much. The government must cap council tax increases.”

Check your council tax band

That's not all! For the rest of our Budget 2008 coverage, click here

More about