Councils could reduce tax bills by £660 million annually if they took simple cost-cutting steps, a report has claimed.

According to the study, in 2006-07, councils in England and Scotland spent over £400 million on publicity, £1.9 billion employing managers earning over £50,000 and over £4.3 billion on employer pension contributions. The total of the three expenditures is therefore £6.6 billion.

The Taxpayers Alliance, which campaigns for lower taxes, found if councils cut publicity, management and pension costs by ten per cent, they can cut council tax by an average of 3.5 per cent, or around £40 off an average Band D bill.

In total, this would save the council £660 million over a year.

Matthew Elliott, chief executive of the TaxPayers’ Alliance, said: “Council tax has doubled in the last decade and is now so high that it tips many families and pensioners over the edge.

“But it doesn’t have to be that way.

“Local authorities of all parties could make meaningful council tax reductions if they saved a modest ten per cent in these three non-priority areas.”

The report, Council Spending Uncovered, reviews spending by local authorities in all corners of the UK and identifies a number of budgets that could be reduced.