A £650m fund has been set aside to help local authorities to implement a council tax freeze in England in 2011-12, communities secretary Eric Pickles has announced.
Mr Pickles said that where an authority does not increase its basic amount of council tax in 2011-12 compared with 2010-11, it will be eligible to receive a grant equivalent to a 2.5% increase in its 2010-11 Band D figure multiplied by the latest available tax base figure.
In a move welcomed by the Local Government Association, ministers said supplementary funding to local authorities in subsequent years of the spending review to compensate them for the council tax income foregone during the period of the freeze would also be provided.
In a written statement to the House of Commons, Mr Pickles added: “The scheme will be voluntary; and will apply separately to each billing and major precepting authority in England (including police and fire and rescue authorities) rather than to each council tax bill issued. Local precepting authorities, such as town and parish councils, will not be included in the scheme.”
The statement underlined that ministers were prepared to use capping powers “where necessary” and would not accept what they deemed to be “excessive rises”.