Council Tax bills in the South West will rise by 4.5 per cent this year, the highest increase in England, new figures released recently revealed. The increase takes the average bill in the region to £1,413, making it the second most expensive region nationally, the survey from the Chartered Institute of Public Finance and Accountancy (CIPFA) shows.

Band D Council Tax payers will now be paying on average £61 more than last year. The increase in 2007/08 was also 4.5 per cent. Across England the average increase for 2008/09 will be 3.9 per cent, a £52 rise.

Steve Freer, chief executive of CIPFA, said: “The dominant factor influencing this year’s council tax decisions is the threat of ‘capping’ by Government. The Minister has emphasised that he expects the average increase to be less than 5 per cent and will no doubt be encouraged that our survey points to an actual average of 3.9 per cent across the country.

“Councils will be redoubling their efforts to make efficiency savings to balance tight budgets. But where there’s still a gap to bridge there is every likelihood that some service levels will have to be reduced.”

The CIPFA survey carried out in conjunction with The Times newspaper analysed the council tax settlements of more than two-thirds of English local authorities in what is the most comprehensive and accurate examination of town hall finances for the coming year.

The figures come amidst a tight central government funding settlement for local authorities, creeping inflation and rising living costs. The average national council tax increase for 2007/08 was 4.2 per cent.