COUNCIL tax payers are to see rises in their bills largely pegged back - despite claims from many local authorities that they are facing an increasing budget squeeze.

Two separate surveys reveal that while council tax rises continue to run above the current rate of 2.4 per cent inflation, they are among the lowest in the past several years.

Figures from the Chartered Institute of Public Finance and Accountancy (CIPFA) released yesterday showed that for an average band D property in the North-East, owners would face a 4.1 per cent rise in their total bills - the same as last year.

This compared with a 4.5 per cent rise nationally, which itself ranks as the second lowest increase of the past decade.

Meanwhile, The Northern Echo's own snapshot survey of billing authorities, also taking into account police, fire, county and parish precepts, shows overall rises for the same property bracket ranging from just 2.2 per cent to a maximum of 4.9 per cent.

Councils in the region have complained that the Government's financial settlement formula is unfair, with the settlement for 2006-2007 in the North-East the lowest of any region in England.

But it is thought that many have been able to manage their budgets by making savings and management efficiencies, while at the same time redirecting money to essential services, although in some cases this has led to redundancies and posts being unfilled.

Councillor Glynn Nightingale, cabinet member for corporate resources at Redcar and Cleveland Borough Council, which has approved a 4.7 per cent rise, said: "Local people need to realise we could have actually reduced council tax by as much as 6.7 per cent had the Government not got its sums wrong."

Councillor Mick Henry, leader of Gateshead Council, said it was managing its budget following a "disappointing" settlement.

He said: "Our priority when we look at how to allocate our budget is always to ensure we direct money to essential services that residents want and need."

Steve Freer, chief executive of CIPFA, said he believed that the threat from central Government of capping budgets if local tax rises exceeded five per cent was also a "dominant factor" in the relatively low rises.

He said: "We believe these are fascinating results. They show how hard local authorities are working to manage and contain local tax increases."