Eleven successive years of above inflation grant increases from Government - and a continued threat of tough action against excessive increases - have led to the lowest increase in council tax for 14 years, and the second lowest ever, Local Government Minister John Healey has announced.
Figures for 2008/09 published today show that the average Band D increase in England will be 4.0%. 265 (58%) authorities will have increases below the 4.1% Retail Price Index, 69 (15%) below the 2.5% Consumer Price Index, 18 (4%) have no increase and three (0.66%) are reducing council tax bills.
Ministers have said consistently that they expect the average council tax rises to be substantially below 5% and the vast majority of local authorities have complied.
However Mr Healey has also announced today that eight authorities have been "designated" and now have 21 days in which to make their case to government. These authorities are Lincolnshire, Cheshire, Leicestershire, Warwickshire, Surrey, Bedfordshire and Norfolk Police Authorities, and Portsmouth City Council.
John Healey MP said: "We have delivered the first ever three year financial settlement for local government, and are moving over £5bn into budgets with no spending strings attached placing financial decisions increasingly in their own hands, and the vast majority have responded well. Our commitment to take action combined with our 45% above inflation increase in Government grant for local services up to 20010-11 has helped bring down council tax rises to a fourteen year low, and most councils have contained their costs and budgeted prudently. But eight authorities are outside the principles I have announced today. That is why I am today designating these authorities and inviting them to discuss their individual cases with me before taking final decisions."
The Minister announced that authorities' 2008-09 budget requirements are excessive if they set a budget requirement increase of 5.0% between 2007-08 and 2008-09, and a council tax increase of more than 5.0% in the same period. Authorities must exceed both principles to be designated for action.
All of the authorities designated for action have 21 days in which to make their case. The Government will carefully consider any representations made before taking further decisions.
