Nick Raynsford

Local authorities are set to clash with the government over council tax rises, according to a new survey.

The poll, published in the Times on Wednesday, showed that more than 50 per cent of councils are planning tax increases of more than five per cent, despite warnings from ministers that they will use capping powers.

Such a move would affect as many as 100 town halls.

Pensioner groups have warned that older people face particular difficulty in paying their bills.

"Most older people are on low fixed incomes," said Tessa Harding, senior policy adviser at Help the Aged.

"They cannot afford to have their income raided in this way, especially as pensions are not increasing at anything like this rate.

"This is going to serve to further anger older people."

Council tax clash

Local government minister Nick Raynsford is holding meetings with nine council leaders, who are planning rises of up to 33 per cent, telling them to revise their figures.

"A proposed increase of 33 per cent flies in the face of public expectations that councils will moderate increases, and does not comply with government demands for low single figures," he said.

However, he conceded that capping powers could not be imposed in all cases, although 65 councils have received written warnings.

"I have never said that I will cap every authority over five per cent," he said.

"I hope that I will not have to use capping powers extensively."

Such a move has been opposed by the Conservatives.

"Crude capping would be a disaster for some of the nation's most vulnerable people, including the elderly and those who rely on the voluntary services," said shadow local government secretary David Curry.

Council tax review

The government is currently holding a review of the council tax system, aimed at bringing in reforms in 2007, to coincide with revaluation of the property bands.

A paper is expected in the summer.

However Raynsford dismissed weekend reports that options included a hybrid option of income and property tax.

He has also rejected a proposal by former local government secretary Stephen Byers that would allow older people to defer their council tax payments until after they die.