Council tax to rise 'three times inflation'

Council tax bills in London will rise by more than three times inflation next month.

A typical household will pay an extra £61 - up 5.8 per cent - according to official spending plans that local authorities have submitted to the Government.

This means the average band-D levy will hit £1,121 in London, though bills will vary from £597 in Wandsworth to £1,339 in Richmond.

The figures emerge today in research by the Conservatives after months of speculation about soaring bills. Demands are on their way to residents and will take effect on 1 April.

They will only be changed if the Government decides some bills are "excessive" and orders councils to reduce them. The 5.8 per cent rise in the capital is likely to fall below the national average, and is less than three times the 18 per cent rise Londoners endured in the current financial year.

The figures include a 7.5 per cent increase in Mayor Ken Livingstone's share of the bill to pay for more police and firefighters.

The smallest rise is 2.9 per cent in Wandsworth - a result of the council freezing spending - and the biggest is in Bexley at 7.5 per cent.

But the general trend of local authorities is a reining back of spending in response to the Government's threat to cap rises not in "low single figures". Many councils have chosen to implement major cuts to services rather than face the humiliation of having their budgets dictated by Whitehall - alongside the expense of having to issue new bills.

Local government expert Tony Travers, of the London School of Economics, said: "After last year, when London had an above average increase, this year it will be having one slightly below the national average. This is, in some ways, beyond Londoners' wildest dreams."

Local government minister Nick Raynsford is expected to decide next month whether to cap councils he thinks are spending too much.

Mr Travers said he thought it unlikely London councils would be capped. But Caroline Spelman, Tory local government-spokesman, said ministers should still consider action to curb the Mayor's share of the tax bill.

She said: "The Government has threatened the big stick of capping - now it is time to name names. The question is: are they going to cap Ken?"

Mr Raynsford did send an official warning letter to the Mayor, but that was when he planned a 9.9 per cent tax increase. That has been cut to

7.5 per cent, or £17 a year - the lowest rise in the Mayor's four years in power.

A government spokeswoman said: "This is a process where we can't rush in. We need to look at all the budgets and make sure we are making watertight decisions. What we have never done is say, 'If you go above this figure you will be capped.'"