Council tax bills in England are set to rise by an average of about 4 per cent this year, a Local Government Association study predicts.

Since Labour came to power in 1997, the average council tax per dwelling in England and Wales has now increased by 96 per cent - from £554 to over £1,000 in 2007/08. Council tax increases this year are likely to push the increase to over 100 per cent - meaning that council tax will have doubled since Tony Blair first arrived in Downing Street. Meanwhile, public sector pay rises will be limited to 2 per cent.

Liberal Democrats say: the Government's failure to properly fund councils will mean large increases in council tax bills and cuts to services relied upon by vulnerable people. Linking local taxation exclusively to house values, as council tax does, will continue to hit pensioners and others on low incomes hard. Council tax should be axed altogether and replaced with a fair system, based on ability to pay.