Council taxpayers face 3.5% rise

The LGA said that the projected increase - based on a survey of 140 councils and police and fire authorities - would be the lowest for more than a decade, despite the pressure on council budgets.

The increase is below the Government's preferred CPI rate of inflation, which is currently running at 4.1%, but above the retail price index which stands at 3%. However both are expected to slow sharply as the downturn bites.

A 3.5% increase in April on the 2008-09 average household council tax bill for 2008-09 would take the average bill for 2009-10 to £1,421 - a rise of £48 over the year or 92p a week.

The LGA said that councils were doing their best to hold down tax increases at a time of economic hardship but the Tories described the rise as a "kick in the teeth" for families and pensioners.

The LGA estimated that councils were facing a £2.5 billion fall in revenues as income from service charges and capital receipts from land and property drop off.

One-in-seven councils has had already had to cut jobs in recent months while one-in-five have introduced a recruitment freeze, the LGA said.

At the same time, the downturn was adding to the pressure on services with more people applying for housing benefit, rising homelessness, and an increase in demand for debt advice.

LGA chairman Margaret Eaton said that despite the difficulties, local authorities were doing their best to limit the rises in council tax.

"Money is tight for everyone and nobody likes paying more council tax but town halls are making enormous efforts to keep bills down," she said.