Council-tax freeze scheme extended
The Government has announced details of plans for a council tax freeze in England for the second year in succession.
The scheme, first unveiled by Chancellor George Osborne at the Conservative conference in October, will see the Government make one-off grants to any authorities which freeze or reduce their council tax bills for 2012/13, at a total cost of £675 million.
The grants, payable for one year only, are worth the equivalent of a 2.5% hike in council tax for local authorities and 3% for police and fire services.
A similar offer was taken up by every council in England last year, allowing a freeze across the country and holding bills for an average Band D home down by up to £72, compared to a 5% rise in the tax if it had kept roughly in line with inflation.
The announcement means that additional grants from central government to local authorities to keep the tax down could total up to £3.3 billion over four years.
Announcing the details of the voluntary scheme, Communities and Local Government Secretary Eric Pickles said: "Last year every council signed up to our council-tax freeze, but with many families still facing difficult times we're rolling over our successful scheme so councils can keep a lid on bills for another year.
"Our two-year freeze promise, potentially worth up to £72 each year to Band D residents, is in stark contrast to the years before when council tax was allowed to double."
Sir Merrick Cockell, chairman of the Local Government Association, said: "Many councils will be keen to help people out by freezing council-tax bills for a second successive year but, if they are thinking of taking this offer up, they will also need to ensure that they are able to manage any future financial consequences as the Government has now confirmed that the funding is for one year only.
"Local authorities provide vital services that people rely on. They do this efficiently and within their means. To carry on doing this effectively, councils need to carefully consider their ability to plan for future years' council tax and spending levels, as well as whether this serves the long-term interests of residents, before deciding if they will take the offer up."
Average Band D bills rose from £688 in 1997/98 to £1,439 in 2011-12. Last year's freeze kept the average Band D bill at that level. In London it was £1,308, in metropolitan areas £1,399 and in shire areas £1,484.