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BankruptcyNews
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 Posted - 25 June 2007 : 09:53:40
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Council tax 'doubles in 10 years'
The average council tax bill has almost doubled in the past decade, says a report by the Halifax building society.
The rise, from more £550 to almost £1,100, is three times higher than the rate of inflation and twice the increase in average earnings.
The tax is now 91% higher than when Tony Blair first took office.
The Local Government Association (LGA), which represents councils in England and Wales, has dismissed the report as a rehash of old information.
Corin Thomson, LGA's programme director, said councils needed the extra money to cope with "major environmental challenges" and the care needs of an ageing population.
"Council tax is being put under huge strain over recent years as authorities are having to deal with massive social and economic change," Ms Thomson said.
Average earnings have increased by 51% over the past 10 years and retail price inflation has risen by 31%.
The typical UK household now has to pay £1,078 in council tax annually, compared with £564 in the 1997/98 financial year.
Growing discontent
Martin Ellis, chief economist with Halifax, told the BBC councils had made smaller increases in recent years because of the anger surrounding the steep rises since the later 1990s.
He said: "Councils may well turn round and say well that's because they're providing better services.
"But we're just highlighting the point that there's been a big, big increase and certainly much sharper than the increase in either prices or average earnings.
When you compare council tax rises with the meagre rise in the basic state pension, you can see why pensioners are having to deprive themselves of basic necessities to get by.
Anna Pearson, Help The Aged
"And this is taking more and more of peoples' disposable income. We have seen, to be fair to councils in the last couple of years, we have seen smaller increases more in line with retail prices in the last couple of years.
"So I think they are taking note of what's been happening and the sort of level of discontent that there's been with the big increases."
Monmouthshire has seen the biggest percentage increase during the past decade, with an increase of 184%.
Next are Powys and Westminster, where council tax per household rose by 150% and 149% respectively.
And figures show that more than half of all districts have experienced at least a doubling in council tax bills since 1997.
Heavy investment
Anna Pearson, Policy Manager at Help the Aged, said many older people on low incomes frequently went without basic essentials to pay their council tax.
"An incredibly complex benefits system lets them down - nearly half the pensioners entitled to council tax benefits don't claim what is rightfully theirs," she said.
"When you compare council tax rises with the meagre rise in the basic state pension, you can see why pensioners are having to deprive themselves of basic necessities to get by.
"In the fifth richest country in the world that is nothing short of appalling."
Local government minister Phil Woolas said Labour had invested heavily in local councils since coming into power.
"It is councils who set council tax, not central government - but this government has put in record investment over the past 10 years, increasing funding for councils by around 40%.
"We have also made it clear we will not hesitate to use our capping powers to deal with excessive increases.
"The result has been that 2007/8 is the third successive year in which the average increase is below 5% and we welcome the greater realism that authorities have shown in their budgeting."
Source: bbc.co.uk
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Council tax doubles in 10 years
