Inflation-busting tax bills likely

JUST when you thought it couldn't get any worse . . . council tax bills could be set for another inflation-busting rise next year, it emerged today.Officials from the Local Government Association(LGA), which represents councils from across the country, are understood to have warned ministers that more big rises could be brought in across the country.

JUST when you thought it couldn't get any worse . . . council tax bills could be set for another inflation-busting rise next year, it emerged today.

Officials from the Local Government Association(LGA), which represents councils from across the country, are understood to have warned ministers that more big rises could be brought in across the country.

And police authorities have warned they could have to increase their element of council tax bills by a further 15 per cent next April – just to maintain services.

The warnings come because of fears that chancellor Gordon Brown will be unable to give local authorities as much as they need because of a downturn in the economy.

If councils do seek such high rises, it could pose a real test for local government minister Nick Raynsford who last week warned councils he was prepared to use his capping powers next year.

Yesterday deputy prime minister John Prescott accused councils of "cheek" for increasing council tax after getting large grant increases.

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And he promised that his department would be looking at capping councils who tried for further high rises next year.

His threats prompted deputy Suffolk County Council leader David Rowe to warn of threats to services.

"We could set an increase of just one per cent next year, but that would mean decimating services – especially for those people who are most vulnerable and who rely on the council," he warned.

Mr Raynsford told the Evening Star that further "unreasonable" increases by Suffolk County Council could lead to capping next year.

That could seriously-threaten council services – especially high-spending social care which was the main reason for this year's 18.5 per cent rise.

The government is expected to offer councils a small rise next year – local authority chiefs across the country don't think it will be large enough to cope with increasing demand for their services.

The LGA predicts that council tax bills could have to go up on average four per cent more than the government's estimate – to more than seven per cent.

And with Mr Raynsford warning that any councils putting their bills up by more than twice the level of inflation – currently 2.9 per cent – could be at risk of capping, the outlook could be bleak.

A spokesman for the LGA said the treasury expected council tax bills to rise next year. "They have calculated they will need to go up by 7.3 per cent just to stand still.

"And with Nick Raynsford hinting that rises of more than 5.8 per cent could be capped, there could be no alternative for councils but to cut services.

"At the same time the education secretary has said he wants to see a real increase in spending on schools. Something's got to give," he warned.

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