This is especially disappointing given the low and stable level of inflation

Hilary Armstrong

Local Government Minister Hilary Armstrong said that the government believed that both budgets and council tax levels were primarily a matter for local authorities who could be held accountable by voters.

She argued that although many councils had done "a good job in containing council tax increases" the government was "disappointed" that overall increases would be 6.4% in the year 2001 - 2002.

"This is especially disappointing given the low and stable level of inflation and that the government has provided �44bn of funding for English local authorities for 2001/02 - representing an increase of 7.2% or �3 billion in total grant and 4.9% in general grant on last year."

Ms Armstrong expressed disappointment

But the government came in for sharp criticism from the Conservative Party.

Shadow environment secretary Archie Norman said: "This confirms that after four years of Labour, typical households are paying �212 more in tax for no improvement in local services.

"Labour has masqueraded as a party of local government but used local councils as a vehicle for more regulation and bureaucracy which has driven up their costs.

"At the same time, local councils have fallen victim to Labour's stealth taxes, such as fuel duty and pensions tax."

Electoral price

He said that the government hoped that people would blame councils for the hike in council tax while "in reality it will be the government that pays the price at the polls".

And Sir Jeremy Beecham, chairman of the Local Government Association, insisted: "The announced increase in council tax can be laid firmly at the feet of increased costs to local authorities from policies that local government has little control over."

Sir Jeremy said matters like the teachers' pay settlement were settled nationally.

He said: "Because of the degree of government control over council funding, a 6.4% increase in council tax reflects an increase in council budgets of only around 1.5%."

Funding a 'good deal'

But Ms Armstrong insisted: "Overall, our funding for local government for next year represents a good deal and will help them deliver real improvements in key services such as education and social services - something we all want to see."

The council tax system replaced the Conservative Party's controversial and unpopular poll tax which levied the same rate on members of the population regardless of their wealth.

Under the council tax, properties are placed in one of eight valuation bands and the amount payable depends on the value of the property.

Most homes in England are in bands A-C and the average council tax will be �740 in 2001-2002, an increase of 6.2% from the current level.