Why your council tax could go up by 40 times the rate of inflation

The Government announced its settlement with England's local authorities today.

The bad news: the central government grant to local councils is being heavily slashed.

The good news (for councils): they can offset some of those losses by putting up council tax.

Councils have been told they can now increase the local tax by up to 2% each year (any level above this requires a local referendum).

In addition, the chancellor announced in the Autumn Statement that local authorities who run social care services can increase council tax by another 2%.

Chancellor George Osborne. Credit: PA Wire

The social care precept is expected to add £23 per year to bills for the average Band D property.

So in some local authority areas council taxpayers could see bills rise by as much as 4% in 2016/17.

Council tax payers are increasingly being asked to fill part of the black hole left by cuts in the central government grant.

But when inflation - as announced this week - is running at 0.1%, it means some English councils will be increasing council tax by 40 times the rate of CPI inflation.

In a statement to ITV News, Local Government Secretary Greg Clark said: