24th February 2010
Council tax bills will increase by 1.6% this year - the smallest
increase since the tax began in 1993 and an effective reduction
once inflation is taken into account.
The increase, which will take the average household council tax
bill to £1,194, was calculated by the Local Government Association
from a survey of the draft budgets of more than 100 councils,
police and fire authorities.
With inflation at 3.7%, 1.6% increase represents a real-terms
cut of 2.1% in the tax, said the LGA.
The hike, which comes into effect in April, will add 36p onto
the average household's council tax bill, compared to 2009/10.
LGA vice-chairman Sir Jeremy Beecham said the real-terms cut
came despite a sharp fall in income and an increase in demand for
councils' services as a result of the recession.
Councils have been hit by a £4 billion deficit in income over
the past two years - the equivalent of losing almost £11 million a
day - due in large part to a decline in sales of land and
buildings, lower interest rates on cash deposits and reduced
revenue from planning applications, car parking and leisure
services.
Sir Jeremy said: "Everyone is facing a squeeze on their finances
in the current economic climate and no one likes paying council
tax. That is why councils have been doing all they can to keep
council tax rises to a minimum.
"Councils have had to take tough decisions to carefully balance
the need to protect essential frontline services while providing
value for money for the taxpayer."
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