Council tax falls again... but only in one borough

Hammersmith and Fulham is set to impose a three per cent cut in its share of the levy, worth almost £27 a year to an average household.

The Tory council's move comes despite protests that the Government is inadequately funding local authorities over the next three years.

Ministers yesterday unveiled a package borough leaders fear could add more than £60 a year to bills, giving a London average of £1,456. Hammersmith and Fulham is determined to drive through cuts and savings as it believes households can no longer cope with further increases.

At present the borough's benchmark band D tax is £1,193, of which £890 is retained locally and £303 goes to Mayor Ken Livingstone to help pay for the Met police, fire brigade and City Hall.

Last year Hammersmith and Fulham cut its share of bills by three per cent - though much of the decrease was eaten up by a 5.3 per cent increase by the Mayor.

Next year's cut, from April, will anger other councils who are pressurising the Government for more cash.

Council leader Stephen Greenhalgh said average council tax bills had risen by 86 per cent in London in a decade. He said: "Too many families are being crippled by high bills. It is up to us to respond by lowering our tax burden."

The initiative will be watched by Tory mayoral candidate Boris Johnson, who says he will cut "excessive spending" at City Hall if elected next May.

The council plans to make the savings by privatising services such as gardening and refuse collection.

More than £4million has been saved on agency staff, while £300,000 was recovered by sacking personal advisers to cabinet members.

The Government has admitted its funding of local authorities is "tight" but said it will cap any which seek to increase bills above five per cent.

Councils are under pressure from population influx, which the Government is accused of undercounting, soaring social care costs and tough EU recycling targets.