Councils are 'bearing down' on the tax rise

The average bill for a Band D property will rise by 4.7% - 0.5% more than in England.

The increase in Wales will still be the third lowest in the past 13 years, according to the Chartered Institute of Public Finance and Accountancy (CIPFA).

The assembly government told councils to keep increases below 5%.

Steve Freer, CIPFA's chief executive, said: "This will be regarded as a very positive result in Whitehall and in town halls throughout Wales.

"There is little doubt that the threat of capping if tax increased exceed five per cent has concentrated minds.

Local government is bearing down on costs and that is good news for the council taxpayer Steve Thomas, Welsh Local Government Association

"Councils simply do not want to set a collision course with government with all of the uncertainty and risk that involved."

Welcoming this year's council tax rise as a "good deal" for the public, Steve Thomas, chief executive of the Welsh Local Government Association, said most authorities were making a "real and concerted effort to bear down on council tax bills".

"Councils themselves want to act prudently, they want to keep the bills down and the bad old days of 15 and 20% council tax rises are gone."

Mr Thomas said last year Welsh local government was set �40m efficiency savings targets and in response made �80m.

"Local government is bearing down on costs and that is good news for the council taxpayer," he said.

Huge pressure

"We are driving for authorities to collaborate with each other to bring down costs."

Local government consultant Jeff Jones said although the council tax rise was higher in Wales, bills were larger in England.

Mr Jones said: "This percentage increase in England is less but in fact an English council taxpayer pays about �300 a year more than a Welsh council taxpayer on B and D, so you're still better off living in Cardiff than in any part of England.

"The council tax raises so little of councils' money and the councils are under huge pressure.

"The other issue is the inflation faced by councils is not the inflation that we face in the streets - 2.7 % -councils' inflation is much greater than that."

Local authorities will receive �3.7bn in the financial settlement for the next financial year.

An assembly government spokesperson said it "recognises that budgeting for all public sector institutions is a difficult process of setting priorities when the demand for services is always greater than the resources available.

"We believe there's an understanding, deriving from the experience of councils, that they can't raise council tax unreasonably."