Published on : Thu, 03 Nov 2005 17:48GMT
by : David Parker

LONDON - Council tax bills are all set to rise by next April by at least £100, as there is a deficit of £2.2 billion, a report by the Local Government Association has warned.

"The government has introduced new standards and is making ever more legislative and policy demands on councils without providing an equivalent level of funding. The proposed increase in government grant of £300m is not even enough to cover basic inflation," said Sir Sandy Bruce-Lockhart, chairman of the LGA. "This new evidence makes for bleak reading for council tax payers."

In the past couple of years, the rise in the council tax was kept down to 5.9 percent and 4.1 percent respectively since there was the looming general election. The Government had stepped in to subsidize the taxes by offering one-off grants. Last year £1 billion had been released by the Treasury. A flagging economy and a generally tough time with cash flow has ensured that Chancellor Gordon Brown cannot be as generous this time.

But the Local government minister Phil Woolas has said that he would make sure that these taxes are kept to a minimum, "The government is very keen to make sure that we have low council tax rises and we are quite prepared to use capping powers if we have to," he told BBC Radio's Today programme. Exactly how he proposes to do this is not clear.

Meanwhile the Office of the Deputy Prime Minister has alleged that the LGA was plucking figures out of thin air, "Some figures that the LGA are circulating are pure fantasy. There are significant areas of uncertainty in the LGA claim. For example, the pressure to spend £68m extra in street cleansing, where they have admitted that it was difficult to quantify costs," it said in a statement.

"They have simply picked the top range of estimates, often from surveys which were not commissioned by councils." But the government is hard pressed to explain these exponential rises after senior citizens like retired social worker Sylvia Hardy are refusing to pay their taxes. Ms Hardy was jailed for two days last month for failing to clear her dues from the previous year.