Council tax rates in England, Scotland and Wales are set to increase above inflation in 2005/06, according to a new analysis.

A study published by the Chartered Institute of Public Finance and Accountancy (CIPFA) predicted that bills will rise by an average £45 to £1,187 for a band D property.

Across Great Britain, that would mean an increase of four per cent. England will see band D bills increase by £47 compared with the current financial year to reach £1,214.

CIPFA said that Scottish bills will rise on average by 3.9 per cent to £1,094.

And in Wales a 4.3 per cent rise of £38 will take the average cost to £925.

"Increased grant from government and the threat of further use of capping powers have helped to limit increases in council tax bills for 2005/06," said CIPFA chief executive Steve Freer.

"Prospects for 2006/07 hinge, as ever, upon future decisions about government support."

He added that 2005/06 budgets "rely heavily upon special one-off funding announced by the chancellor in last year's pre-Budget report".

"If that funding is not repeated in 2006/07 we could see the return of higher increases next year."

Tax rises

For the Conservatives, Caroline Spelman said that "hardworking families and pensioners will be forced to pay over £100 a month in council tax under" under Labour.

"People across the country have been punished with council tax rises of 76 per cent since 1997, and council tax is just one of the 66 stealth tax rises Labour have piled on - all after Mr Blair promised he had 'no plans to increase tax at all'," she added.

"Regardless of Labour's attempts to limit council tax  rises in an election year there can be no doubt Labour will continue to drive up council tax bills in any third term, not least by using revaluation next year and then by introducing higher council tax bands."

Liberal Democrat spokesman Edward Davey said there would be "much higher rises after the election".

"Councils have already warned they will need an extra £1.5 billion in 2006/07, equivalent to an extra 7.5 per cent on everyone’s bill," he said.

"Labour's council tax system is now like a pressure cooker, building up steam and close to exploding. Revaluation, under which millions of families will face higher bills, could be the trigger.

"It's time to stop tinkering with council tax and scrap it altogether."

Government

Local government minister Nick Raynsford said the CIPFA figures showed the lowest council tax increase in a decade amounting to less than £1 a week added to average council tax bills.