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London maintains low tax record

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Increases in council tax are set to be highest in the Yorkshire & Humber region and lowest in London, according to a survey of finance directors.

The Chartered Institute of Public Finance and Accountancy’s annual survey predicts that Yorkshire & Humber council tax payers will see an average increase of 1.2% while Londoners will see a rise of just 0.1%.

Homeowners in the capital also fared well last year, when the average rise was 0%. Meanwhile, residents in the south-east are set to see an average rise of 1% while the rest of England will be a little over 0.5%.

No councils are setting council tax increases below 1%, as the government has offered freeze funding equivalent to 1%, however Cipfa’s figures provide an indication of what proportion of councils in a region intend to increase the charge.

Cipfa’s survey, based on survey responses from 276 councils, also suggests 49% will reject the government’s freeze funding and increase council tax next year.

However, LGC research based on publicised intentions and final decisions of 306 councils in England, shows that 106 are planning to increase council tax - representing 34% of the councils whose intentions and decisions are recorded.

Councils have until 11 March to set council tax, but whatever the final figure it is certain the number increasing council tax this year will exceed the 35 who did so last year.

Cipfa director of policy Ian Curruthers said councils were faced with increasingly difficult decisions as they set budgets.

“Councillors must take council tax decisions based on local priorities. As the pressures from this period of unprecedented austerity intensify, all councils are having to strike an increasingly difficult balance between protecting hard-pressed taxpayers and maintaining local services,” he said.

“The imminent changes to local authority funding systems are bringing added uncertainty to councils’ financial management and making it more difficult than ever for councillors to take the medium and longer term decisions required.”

Even though the government’s record on freezing council tax looks increasingly shakey since the nationwide freeze of 2011-12, communities secretary Eric Pickles welcomed Cipfa’s survey showing the average change across England would be a rise by 0.8%.

He described it as a “tax cut in real terms” and said: “This government has worked to freeze council tax for three years, helping hard-working families and pensioners with their cost of living.”

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