Council tax to rise by three times rate of inflation

Council tax bills in London will rise by three times the rate of inflation next year, experts claimed today.

Most boroughs are expected to increase their demands by three to five per cent. Inflation is only 1.2 per cent.

But the pain would have been even worse without a £1 billion bailout announced by Chancellor Gordon Brown yesterday. In previous years, council tax increases have been in double figures.

Government grants to London boroughs are to go up by between four and eight per cent, and ministers said there was now no excuse for authorities to lift council tax by more than five per cent.

Bills will land on doorsteps just weeks before the likely May election.

Bob Neill, Tory leader in the London Assembly, called the handouts a "pre-election sweetener". But Sir Robin Wales, chair of the Association of London Government, warmly welcomed the additional funding, which he said "will help ease pressure on our crucial public services."

The most generous settlements go to Greenwich and Hillingdon, where grants go up by 7.9 per cent. Kensington and Chelsea will see a rise of only four per cent.

The average increase in outer London will be 5.3 per cent, but in the inner boroughs 6.1 per cent.

The Metropolitan Police is to receive an extra £110 million, a grant rise of 5.8 per cent. But London's fire authority will only get only a 3.2 per cent.

But the Liberal Democrats claimed that, even after the increase in police funding, it would still fall ?83 million short of the amount needed to increase officer numbers.