The Government has confirmed the funding settlement for next year will not change from figures announced in the Comprehensive Spending Review 2007, despite fears over the economy. Local government minister, John Healey, also warned he wanted to see council tax ‘substantially below 5%' – or he would use his capping powers. His threat came as a new inflation rate of 3.1% was announced. The minister has also embarked on a tour of councils with a 0% council tax rise – in an effort to highlight what he expects councils to aim for. News on the settlement comes as a Local Government Association survey predicted an average 3.5% council tax increase – the lowest rise in the past decade, but still above the inflation rate. Despite rising pressures and cuts in income, the survey showed councils were keen to keep costs down for residents. Cllr Margaret Eaton, chairman of the LGA, said: ‘Town halls are making enormous efforts to keep bills down. Councils understand people are suffering and they're working flat out to keep council tax down, to keep local businesses afloat, and help people deal with the impact of the recession.' Councils with 0% tax rises include Hillingdon, Hackney, Barking and Dagenham and Newham LBCs. South Hams and St Edmondsbury BCs have also set a zero rate. Hammersmith and Fulham LBC plans a 3% cut in its council tax. A spokesman for the council said: ‘At a time of great financial uncertainty for many families, we should be talking about how we tighten our belts in local government.' Mr Healey told Parliament this week there would be no change to the 2008/09 settlement, ‘despite the economic downturn'. The £73.1bn settlement would guarantee a 4.2% increase in funding for all councils. However, he added: ‘I expect next year's average council tax rise to be substantially below 5%. I will not hesitate to help people by capping any excessive increase, if I have to.' He also warned efficiency savings had to ‘maintain or improve vital local services', and not just come from service cuts. Mr Healey made the statement to Parliament, before touring three east London boroughs – Hackney, Newham and Greenwich – where council tax has been frozen, but where services are still being improved. His visit incorporated a council facility, which puts a leisure centre, library, further education classes and access to council services on one site. Other services he saw included investment in employment services to help people through the credit crunch, and free swimming for the under 18s and older people. Regional breakdown of projected council tax rises East of England 3.8% East Midlands 3.6% London 1.2% North East 3.8% North West 3.5% South East 3.8% South West 3.3% West Midlands 4.0%
