By Daniel Hunter
The Chancellor of the Exchequer has announced new support for local authorities in England to help them freeze council tax for a further year and assist in keeping those bills down.
The Government will set aside an extra £450 million to help freeze council tax bills in England. The support for local authorities means that taxpayers living in an average Band D home in England could save up to £72 on a five per cent rise in council tax.
Over the last two years the Government has provided grants of around £2 billion to help freeze council tax. A freeze in council tax in 2013-14 would represent a real terms cut of around two per cent and a fall of nine per cent in real terms over the past three years.
The £450 million will be made available, through a new grant scheme, to local authorities who decide to freeze or reduce their council tax next year. If they do, councils, police and fire authorities will stand to receive £225 million of funding in both financial years 2013-14 and 2014-15, equivalent to raising their 2012-13 council tax by one per cent.
In addition, in 2013-14 the Government will propose to lower the local authority tax referendum threshold to two per cent. This would mean if a local authority seeks to raise its relevant basic amount of council tax by more than two per cent, local people would have the right to keep council tax bills down through a binding referendum veto. The Secretary of State for Communities and Local Government will formally set out the detail on this in December.
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