Government sets £805m aside to help freeze council tax

The Chancellor has announced government support to help local authorities freeze council tax for a second year.

The May 2010 coalition agreement included a pledge to ‘freeze council tax in England for at least one year, and seek to freeze it for a further year, in partnership with local authorities’.

‘The support for local authorities, on top of the existing freeze, means that taxpayers living in an average Band D home in England could save up to £72 on a 5% rise in council tax,’ HM Treasury said today. 

‘A new grant scheme will be open to all billing and major precepting authorities, including police and fire authorities, which decide to freeze or reduce their council tax next year. If they do, councils will receive additional funding, equivalent to raising their 2011/12 council tax by 2.5%. Police and fire authorities will receive additional funding equivalent to raising their 2011/12 council tax by 3%.’

All local authorities took up a similar offer last year, enabling them to freeze council tax for 2011/12.