COUNCIL tax bills are set to rise across the region this year with the majority of local authorities increasing precepts rather than accepting a Government grant to freeze the tax.
The North-East now has the highest council tax in the country, according to the Chartered Institute of Public Finance and Accountancy’s (CIPFA).
CIPFA’s annual council tax survey reveals that bills will rise by an average of 0.9 per cent in the North-East and Yorkshire in 2014/15.
This will mean an average bill of £1,549.10 for a Band D property in the North-East and £1,440.55 in Yorkshire and the Humber.
In the face of huge budget cuts, many of the region’s local councils have opted to increase the tax by as much as 1.99 per cent – with two per cent rises triggering a local referendum.
The Government has offered councils a grant equivalent to one per cent of their council tax income if they freeze the tax.
In the North-East, several councils including Hartlepool and Sunderland have accepted the grant, although many have not.
One of the latest councils to set a 1.99 per cent increase is Redcar and Cleveland.
Explaining the decision, Norman Pickthall, cabinet member for corporate resources, said: “Even with this modest increase in place the council still has to make £19.8m in savings over the next three years, as a result of Government funding cuts and service demands.
“Accepting a Government grant to freeze council tax would only provide short term relief and would cost the council a further £2.6m by the end of the decade.
“Councillors felt that they had to reach an appropriate position that balances service delivery needs against a council tax increase.”
Coun Bill Dixon, leader of Darlington Borough Council, which last week agreed a 1.94 per cent rise, claimed the entire council tax system was flawed.
A study released today by the York-based Joseph Rowntree Foundation also criticised the tax, claiming it was “unfair, unpopular and outdated”.
According to the report, After the Council Tax: Impacts of property tax reform on people, places and house prices, policy makers and politicians should start thinking about long-term replacements for council tax.
The charity stated that it was becoming unsustainable for ministers to offer grants to freeze council tax.