Council tax bills set to rise 4%

Council tax bills in Shropshire 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 about £1,145 in 2008/09 - an extra 85 pence a week.

The rise is based on a survey carried out by the Local Government Association (LGA) - which represents all councils in the country - involving more than 100 local authorities, including Shropshire.

Council chiefs revealed they expected bills in the county to go up by 4.4 per cent - above the average of four per cent predicted for England based on the research findings.

The LGA said draft budgets disclosed by all the councils showed inadequate government funding was forcing many councils to make massive efforts to keep council tax rises below five per cent.

It 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.

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

About 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 to a real terms one per cent increase. Council tax would have been a lot lower with a more realistic central government grant,” he said.

“Some areas have found themselves shortchanged because flows of migration have been underestimated.

“The only way to get local government finance on a stable footing would be root and branch reform of how councils are funded so that they are less reliant on money from the Government.

“Being allowed to keep more money that is raised locally would give councils much greater control over their budgets,” he added.

HOW THE FIGURES ADD UP:

• Shropshire County Council - 4.4 per cent (proposed).
• Bridgnorth District Council - no proposal at present (should be made public tomorrow).
• Oswestry Borough Council - 0 per cent increased.
• Powys - no proposal.
• North Shropshire District Council - 0 per cent rise.
• Shrewsbury and Atcham - three per cent (proposed).
• South Shropshire District Council - 2.5 per cent rise (proposed).
• Telford and Wrekin - 4.3 per cent (proposed).

By Sunita Patel