COUNCIL MERGERS ARE A ONE-WAY DOOR

First published by: The Guardian

TRADE UNIONS WARN LOCAL AUTHORITIES NOT TO BREAK TRUST PUT IN THEM BY COMMUNITIES

Labour councillors in Westminster, Kensington & Chelsea and Hammersmith & Fulham are all in favour of any genuine efficiencies. But we believe major long-term changes should not be driven by one party's political agenda. The planned merger would result in services being provided to a population equivalent to the size of Glasgow. Large councils are not necessarily more efficient – there have been many high profile failures when councils have merged services before. 

We believe that there must be cross-party involvement and wide public support for these proposals before they are carried out. Sadly, the Conservatives in all three boroughs have been highly secretive. Indeed, they would not allow their officials to consult any opposition councillors in the three local authorities prior to the announcement and have failed to provide any detailed information since. We also have the following concerns:

The Conservatives are not ruling out using this merger as a mechanism for even more frontline service cuts, stealth taxes and loss of jobs, or as an excuse to undermine local democracy or sell off more community buildings. Nor have they explained how local residents will keep their ability to hold their council to account. They have not explained how any newly elected administration would be able to secede from any part of this if political control changes. They have also failed to explain why these particular local authorities should merge services. 

Already, there appear to be different messages coming from the three Conservative authorities. This confusion does not bode well for the project's success. We call on the Conservatives to take a more open, inclusive and transparent approach to the plans. Cllr Judith Blakeman, Leader of the opposition, Royal borough of Kensington and Chelsea, Cllr Stephen Cowan Leader of the opposition, London borough of Hammersmith and Fulham, Cllr Paul Dimoldenberg Leader of the opposition, City of Westminster 

• As the first chief executive to take responsibility for managing two local authorities, I am writing to express disappointment at your coverage of the proposed arrangement between three London boroughs. The London-centric vision gave little credit to the dozen or more such partnerships that now exist. These have delivered millions of pounds of savings and service improvements and found many lessons for others contemplating this path.

The key to success is the nature of the arrangements that control the joint business. If constructed well, to give the politicians of each partner a real say, this can allow local standards of services to exist alongside the efficiency of a single officer structure and shared services. The thorny issue of what happens if the politics change is answered by the simple truth that once an arrangement is in place, any change requested by any of the partners would need to justify the cost and disruption of creating a parallel structure. In the current climate, local taxpayers are hardly likely to be positive about this. In our Adur/Worthing partnership we have always recognised that each new joint arrangement is probably a one-way door.

Ian Lowrie

Chief executive, Adur district council/Worthing borough council   

 • There have been many times during my years as a headteacher that I have been left bewildered by government policy; however this week's announcement truly surpassed all others. Every school-age child in the country has benefited hugely from their local School Sports Partnership in creating collaborative working between schools, community coaches and specialist providers based on the Olympic values. 

They have increased engagement with sport for pupils and staff and provided a wealth of opportunities. In my own school, involvement in the School Sports Partnership has had a direct impact on raising standards annually, has enabled us to develop an increasingly creative curriculum and to ensure that all pupils, parents and staff appreciate the value of committing to a healthier lifestyle as well as instilling the values of excellence, inspiration, courage, determination, respect, friendship and equality.

However, the coalition government will cease all direct funding for PE and school sport from 31 August 2011, less than one year before the Olympics. The legacy that these games should have will now be in doubt as the funding ends and the systems that have become very well established are left to fragment. 

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.

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COUNCIL TAX REVALUATION 'WOULD HIT POOREST THE HARDEST'

First published by: The Guardian

COMMUNITIES SECRETARY, ERIC PICKLES, DEFENDS GOVERNMENT DECISION NOT TO REVALUE COUNCIL TAX BANDS

Eric Pickles said based on a revaluation in Wales, 7m households would be worse off from a similar exercise in England. The government today defended its decision not to revalue Council Tax bands during the current parliament, claiming the exercise would hit the poorest the hardest. The communities secretary, Eric Pickles, announced the move last night, saying families would be up to £320 better off than if a planned revaluation by Labour had taken place. 

Labour said the announcement was "cynical and misleading" as the party had pledged in its election manifesto that it would not have held a Council Tax revaluation in the next parliament. Today Pickles acknowledged that current Council Tax bands were based on dated information, but said there was no need to conduct a revaluation because the current system was fair. In an interview on BBC Radio 4's Today programme, Pickles said that, based on an unpopular revaluation in Wales, 7m households would be worse off from a similar exercise in England. "Let's go back to Wales. 

The people who were hit the hardest were those on the lowest bands, A to C. Something like two-thirds of the increases occurred in those bands in Wales. This would actually hit poorer people harder than it would hit richer people." He said a planned revaluation by the Labour government would have meant the average Band D tax bill would rise by £1,600 a year. "What we want to do is offer some degree of stability. Just coming out a recession I don't really think we should be imposing an extra £1,600 worth of taxation on them," he told Today. Plans for a revaluation of 22m homes in 2007 were postponed by the Labour government in 2005, after the Welsh revaluation prompted anger over Council Tax rises.

Pickles also denied the government was being centrist by denying councils the scope to revalue bands in their areas. "They can raise their Council Tax. We are going to remove capping and allow local people to decide the level of their Council Tax by way of a referendum. So we are taking power away from the centre and giving it to local people," he said. He insisted the current system was fair. "It is the relationship between the top and the bottom bands that's important and the relationship between the north of England and the south of England. They are roughly in the same position that they were 20 years ago. So there is actually no need for a revaluation."

Pickles also announced an independent review of Council Tax inspections, which he said would "rein in intrusive snooping" by restricting the data gathered and stored about people's homes. Inspectors from the Valuation Office Agency (VOA) assess the value of properties for Council Tax purposes, and there has been controversy over their collection of data on features of homes such as the number of bedrooms or bathrooms, whether it has a patio and whether it enjoys a nice view or is in a good neighbourhood. An independent data audit of the VOA would protect privacy and civil liberties as part of the government's agenda of dismantling the "database state", Pickles said.

"We have cancelled Labour's plans for a Council Tax revaluation which would have hiked up taxes on people's homes," he said. "The new government will protect the privacy of law-abiding citizens from intrusive spies-in-the-sky and halt state inspectors from barging into England's bedrooms and gardens. "We are standing up for the people who have pride in their home, and calling time on Labour's state snoopers and surveillance state. "Hefty Council Tax bills are a constant financial worry for many people. Today we are setting their minds at ease, and protecting the interests of the less well-off in particular who were the hardest hit from Labour's Council Tax revaluation in Wales."

A Labour spokesman said the party "made an unequivocal commitment that there would be no Council Tax revaluation in this parliament". "This is a cynical and misleading manipulation of facts," he said. A spokeswoman for the VOA said it was "absolutely not the case" that its inspectors' work amounted to snooping on householders. She said the agency has never exercised its legal right to enter a home since it was introduced by legislation in the early 1990s.

Consumer expert Martin Lewis, of moneysavingexpert.com, said the failure to hold a revaluation would mean 400,000 homes remaining in the wrong Council Tax bands.

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX. 

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THE COUNCIL TAX SHOCK OF LIVING ALONE

FIRST PUBLISHED BY: THE GUARDIAN

LOCAL AUTHORITIES ARE USING PRIVATE COMPANIES TO TRACK DOWN PEOPLE WRONGLY CLAIMING SINGLE-PERSON DISCOUNT, BUT THE INNOCENT ARE ALSO BEING CAUGHT

When Sarah Dodds received a letter from Bristol city council demanding £3,000 in unpaid Council Tax, she assumed there had been a mistake. However, things got worse when she called to find out what was going on. The council, she was told, was accusing her of fraudulently claiming the 25% Council Tax discount given to those living alone. It wanted its money, backdated to 2002, and there was apparently no appeal.

Her "crime" was allowing her estranged son to have his bank statements and other letters sent to her home. By doing so, the semi-retired civil servant has become caught up in a campaign adopted by councils across the country to reduce single-person discount fraud, which is estimated to be costing around £100m a year. 

Guardian Money has learned that a growing number of local authorities are handing over lists of residents receiving the discount to credit reference companies so they can grade each according to the potential risk of fraud. If you claim the 25% discount and allow anyone else to have a financial link with your home, which might include having bank or credit card statements sent there, you can expect a letter asking whether you are entitled to the discount, typically worth around £300 a year. 

It appears you are particularly likely to receive a letter if you have a student living with you. Full-time students on qualifying courses and student nurses are among those disregarded for Council Tax purposes.

"My son and I are virtually estranged and I do not know where he lives," Dodds says. "He sometimes stays with his father, the rest of the time he couch surfs. He turns up occasionally to pick up his mail. Apart from that, our paths rarely cross." She has told Bristol council this, but staff are adamant she must pay or tell them where her son lives. "I am unable to do this. I have tried to get a message to him but to no joy," she says.

Dodds used to work for the Department for Work and Pensions, and part of her job involved trying to catch those committing benefit fraud. She regularly had to make surprise visits to claimants' homes to establish whether other people were also living there. "I've suggested to the council that it can send someone round to check I live alone but it has declined. Anyone visiting would soon establish that my son doesn't live here. I feel the council is bullying me. Faced with this debt, of course, I would tell the council where my son lives if I could. It won't listen," she says.

The action taken by Bristol and other local authorities is prompted in part by the Audit Commission, which has highlighted that councils are losing as much as £100m a year to single-person discount fraud. Last month it said councils had detected more than £22m of false claims for student and single-person Council Tax discounts.

Bruno Rost, a spokesman for credit reference agency Experian, which conducts checks for local authorities, says this has become a significant part of the company's business. "We take the council's list of residents claiming the discount, cross-reference it against our databases and then grade each one according to the potential risk of fraud." He says Experian is looking for evidence of financial activity by people other than those who claim to be living alone – such as evidence of shared bank accounts or utility bills.

Experian promotes a "three-letter approach" to be used when a council suspects a householder is wrongly claiming the discount. A first letter makes them aware of the circumstances in which the discount can be claimed. A second asks householders whether they believe they should be receiving it, and in a third letter the council says it believes the householder may not be entitled to the discount. "Since we started working in this area in 2006-07 we have saved local authority clients around £100m. This is money that can go back into frontline services," Rost says.

In October, Rushmoor borough council, which covers Aldershot and Farnborough in Hampshire, warned its residents that it was tackling the issue alongside all other councils in the county. The exercise is being carried out by a company called Northgate Information Solutions. Residents who receive a letter asking for further details are required to complete a form and return it to Northgate.

"Residents should make sure they reply to the letter, otherwise their discount may end," the council warns on its website. A similar move has just been announced by the district councils of Lincolnshire. The councils say the law allows them to contract out this function. Checking entitlement to discounts is covered in section 12 of the Local Authorities (Contracting Out of Tax Billing, Collection and Enforcement Functions) Order 1996.

Peter Wood, a spokesman for Bristol city council, refused to discuss Dodds's case in detail, and declined to say what appeal options were open to Bristol residents caught up in her situation.

In a statement, he said: "To resolve situations where customers claim they are still entitled to a discount, we would request evidence of the present address of any named third party in order to support their claim. This evidence must be in the form of an official document. It is important to note that financial data held by credit agencies does not include addresses used purely for the delivery of post. The financial data relates to addresses where individuals live, or where they say they live."

He said that since the council started the review, it had removed discounts to the total value of £650,000. "Savings in excess of £1m are expected. Only a very small number have been backdated as far back as 2002," he added.

Experian's website was more forthcoming. It says if you are no longer linked to a person who is registered to your address, you should contact it and explain the situation. "If you are no longer connected, we will be able to break the link between you," it says.

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX. 


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UK AUTHORITIES ATTACKED FOR ISSUING 1.2M COUNCIL TAX SUMMONSES

FIRST PUBLISHED BY: THE GUARDIAN

1.2 MILLION PEOPLE RECEIVED A COURT SUMMONS LAST YEAR FOR COUNCIL TAX

Local authorities have been criticised for using heavy-handed tactics to recover Council Tax arrears after the Liberal Democrats published figures today showing that more than 1.2 million people received a court summons last year, with nearly 600,000 visited by bailiffs after falling behind with payments. The data, obtained under the Freedom of Information Act, showed councils filed for bankruptcy against 1,706 people.

The Lib Dems' local government secretary, Julia Goldsworthy, said public bodies had a duty to mitigate "the devastating effect that failing to pay Council Tax can have on families", particularly those already struggling under the burden of mortgage payments and rising bills. "Just as lenders are being asked to reduce repossessions, public bodies should do everything they can to ensure that bankruptcy is only ever a last resort," she said.

"This is not a licence to avoid paying bills, it is about ensuring that court appearances and bankruptcy are avoided where possible." The Lib Dems received responses from more than 170 local authorities. The data showed that 1.23m summons were issued in 2007/08, with 570,500 bailiff visits during the same period.

The most common method to try to recover Council Tax was an attachment of earnings order, in which a debtor's employer is asked to deduct the money from their salary and pay it directly to the council. Authorities can launch a bankruptcy petition where more than £750 is owed. The Local Government Association (LGA) confirmed the Lib Dem figures but said 99% of people who received a summons or were referred to bailiffs did not actually end up in court or have any goods seized.

"Town halls only take measures such as bankruptcy as an absolute last resort and with people who have a history of non-payment," said the LGA vice-chairman, Sir Jeremy Beecham. "People struggling to pay bills are given as much leeway as possible." A spokesman for the Department of Communities and Local Government said it was "only fair" that councils pursued Council Tax debts as not doing so would increase bills for others. "Our existing guidance makes clear that they should only consider court action as a last resort for collecting Council Tax," he said.

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.


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COUNCIL TAX REVALUATION 'WOULD HIT POOREST THE HARDEST'

First published by: The Guardian

COMMUNITIES SECRETARY, ERIC PICKLES, DEFENDS GOVERNMENT DECISION NOT TO REVALUE COUNCIL TAX BANDS

Eric Pickles said based on a revaluation in Wales, 7m households would be worse off from a similar exercise in England. The government today defended its decision not to revalue Council Tax bands during the current parliament, claiming the exercise would hit the poorest the hardest. The communities secretary, Eric Pickles, announced the move last night, saying families would be up to £320 better off than if a planned revaluation by Labour had taken place. 

Labour said the announcement was "cynical and misleading" as the party had pledged in its election manifesto that it would not have held a Council Tax revaluation in the next parliament. Today Pickles acknowledged that current Council Tax bands were based on dated information, but said there was no need to conduct a revaluation because the current system was fair. In an interview on BBC Radio 4's Today programme, Pickles said that, based on an unpopular revaluation in Wales, 7m households would be worse off from a similar exercise in England. "Let's go back to Wales. 

The people who were hit the hardest were those on the lowest bands, A to C. Something like two-thirds of the increases occurred in those bands in Wales. This would actually hit poorer people harder than it would hit richer people." He said a planned revaluation by the Labour government would have meant the average Band D tax bill would rise by £1,600 a year. "What we want to do is offer some degree of stability. Just coming out a recession I don't really think we should be imposing an extra £1,600 worth of taxation on them," he told Today. Plans for a revaluation of 22m homes in 2007 were postponed by the Labour government in 2005, after the Welsh revaluation prompted anger over Council Tax rises.

Pickles also denied the government was being centrist by denying councils the scope to revalue bands in their areas. "They can raise their Council Tax. We are going to remove capping and allow local people to decide the level of their Council Tax by way of a referendum. So we are taking power away from the centre and giving it to local people," he said. He insisted the current system was fair. "It is the relationship between the top and the bottom bands that's important and the relationship between the north of England and the south of England. They are roughly in the same position that they were 20 years ago. So there is actually no need for a revaluation."

Pickles also announced an independent review of Council Tax inspections, which he said would "rein in intrusive snooping" by restricting the data gathered and stored about people's homes. Inspectors from the Valuation Office Agency (VOA) assess the value of properties for Council Tax purposes, and there has been controversy over their collection of data on features of homes such as the number of bedrooms or bathrooms, whether it has a patio and whether it enjoys a nice view or is in a good neighbourhood. An independent data audit of the VOA would protect privacy and civil liberties as part of the government's agenda of dismantling the "database state", Pickles said.

"We have cancelled Labour's plans for a Council Tax revaluation which would have hiked up taxes on people's homes," he said. "The new government will protect the privacy of law-abiding citizens from intrusive spies-in-the-sky and halt state inspectors from barging into England's bedrooms and gardens. "We are standing up for the people who have pride in their home, and calling time on Labour's state snoopers and surveillance state. "Hefty Council Tax bills are a constant financial worry for many people. Today we are setting their minds at ease, and protecting the interests of the less well-off in particular who were the hardest hit from Labour's Council Tax revaluation in Wales."

A Labour spokesman said the party "made an unequivocal commitment that there would be no Council Tax revaluation in this parliament". "This is a cynical and misleading manipulation of facts," he said. A spokeswoman for the VOA said it was "absolutely not the case" that its inspectors' work amounted to snooping on householders. She said the agency has never exercised its legal right to enter a home since it was introduced by legislation in the early 1990s.

Consumer expert Martin Lewis, of moneysavingexpert.com, said the failure to hold a revaluation would mean 400,000 homes remaining in the wrong Council Tax bands.

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.

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STURGEON VOWS TO KILL OFF 'DISCREDITED' COUNCIL TAX

First published by: The Guardian

NICOLA STURGEON YESTERDAY PLEDGED TO ABOLISH THE 'DISCREDITED' COUNCIL TAX IN SCOTLAND IF THE SNP WINS POWER AT NEXT YEAR'S HOLYROOD ELECTIONS.

In a well-received speech at the party's conference in Perth, the deputy leader said a Nationalist government would introduce a local income tax based on ability to pay. 'Council Tax has increased by 60per cent since 1997 - four times the rate of inflation. It is deeply unfair and hits hardest those who can least afford to pay it,' she said. The replacement would mean more than half a million pensioners would pay nothing and most others would pay less.

With the party confident following its success in recent polls, Sturgeon told activists that they had their best chance ever to realise their 'dream of independence'. Her closing speech contained a strong attack on First Minister Jack McConnell, the Prime Minister and the Chancellor. She added: 'What people the length and breadth of Scotland are fed up with can be summed up in just one word - Labour.'

She also made a joke at the expense of party leader Alex Salmond, referring to a recent poll which found he was rated higher in several categories than McConnell. But she said the First Minister beat Salmond in one category. 'The Scottish people think Jack McConnell is more conceited than Alex Salmond,' she said. 'And let's be frank - that takes some doing.'

Sturgeon also criticised Scottish Liberal Democrat leader Nicol Stephen for refusing to go into a coalition with the SNP unless it ditched its commitment to an independence referendum. She also revealed plans to increase provision of free nursery education for all three- and four-year-olds, and get rid of graduate debt by reinstating grants and abolishing tuition fees.

At the Scottish Liberal Democrats' autumn conference in Dunfermline, leader Sir Menzies Campbell said the SNP had 'no coherent vision for Scotland'

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.

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FAMILY FINANCES ARE SQUEEZED – WHAT CAN YOU DO TO EASE THE PAIN?

First published by: The Guardian

LOOK AT HOW TO BRIDGE THE INCOME GAP

With everything from the cost of driving, food and bills rising families are struggling. Spring will bring a chill for most of us - a combination of at least 45 tax and benefit changes will ransack household budgets already depleted by soaring food and fuel prices, and predicted interest rate rises will tip many mortgage holders into the red.

On average, households are already £480 a year worse off following tax changes introduced in January, according to the Institute for Fiscal Studies. April's reforms, including increases to fuel duty and national insurance contributions, will add an extra £200 burden. 

The problem of making ends meet is particularly acute for families. Last year households with dependent children needed an additional £650 a month just to cover everyday living costs compared to those without, according to the Consumer Credit Counselling Service (CCCS).

Families with more than three children are, on average, £45 short of the money they need to live each month. No wonder, then, that 28% of Britons are spending more than they earn each month, according to Cooperative Insurance and homeless charity Shelter. Joanna Parsley, associate director of charity Credit Action, said: "Even people who have had a marginal increase in their salaries will find it is cancelled out by rising living costs. Those with no children or on lower incomes might be better off because of an increase in the personal allowance, but for most of us there really is no way to avoid the squeeze. It is vital that everyone looks to revisit their finances and get them in order."

Homeowners are likely to be more precarious than renters, the CCCS said. On average, clients who own their own home have more than £30,000 in unsecured debts on top of their mortgages. And although interest rates on credit cards and personal loans don't usually move in line with bank base rate, a 2% rise would lead to a £307 increase in monthly mortgage payments. "It is the lull before the storm," said CCCS spokeswoman Una Farrell last week. "Mortgage holders have managed quite well because interest rates have been so low, but we are expecting a big influx of new clients as rates rise."

No section of society is safe. CCCS chairman Lord Stevenson said: "It seems likely that many more families, including better-off ones, will be increasingly prone to over-indebtedness in the months ahead. "It is also not a uniform picture: public sector cuts in terms of jobs, spending and benefits will weigh disproportionately on certain groups, and the incidence of unmanageable debt bears down harder on specific parts of the country, such as London and Yorkshire."

It is easy to blame inflation and tax rises, but are we also to blame for expecting too high a standard of living? Apparently not, if research by First Direct is anything to go by. It found that young people would have to increase their income by 55% to enjoy the lifestyle their parents had at the same age. The figures show that someone in their mid-twenties would have to earn £39,720 to buy a house, fund a wedding and afford a first child; the average salary for 20-somethings is nearer £25,000.

In November the Office of National Statistics released its latest data on the cost of UK lifestyles, which showed that in 2009 the average household spent £16 a week less than the previous year - the first time expenditure has fallen since current recording methods were introduced in 2001. "In statistical terms that's quite a robust change," said ONS statistician Giles Horsfield. "We noticed that a greater proportion of the weekly spend went on food, and less went on transport and recreation."

Figures for 2010 won't be released until the end of the year, but transport and food will almost certainly swallow even bigger slices of the weekly budget thanks to an increase of about 18 % in fuel costs over the past year, according to PetrolPrices.com, and a 4.2 % increase in groceries, according to shopping website mySupermarket.

The average disposable household income in the UK of £28,354 is clearly not enough to meet a household's daily outgoings. So, the Observer decided to look at typical and - in most cases -essential household costs to work out exactly why we are so broke, whether the situation is likely to get better or worse - and what you can do about the income gap.

Motoring

The expense of running a new car rose to £5,869 last year, with fuel (£1,300) and depreciation (£3,072) the most significant costs, according to the RAC. Owners of used cars faced an average cost of £4,441 in 2010, including £1,396 in fuel and £1,040 in depreciation. With the average cost of a litre of standard unleaded now costing 133.34p and a litre of diesel hitting 139.71p, according to PetrolPrices.com, it will come as no surprise that the cost of running a car is expected to soar this year.

Fuel duty is set to rise by inflation plus 1p on 1 April (the ninth tax increase since December 2008), adding between 3p-4p a litre at the pump and around £50 to the average annual bill. To combat rising fuel costs, drivers should make sure tyres are well inflated and should drive sensibly, get their car serviced regularly to maintain engine efficiency, avoid unnecessary use of air conditioning, and get rid of roof racks to improve aerodynamics. Also consider lift-sharing, try to find the cheapest local petrol - PetrolPrices.com is a useful source - and take advantage of discounts and supermarket deals.

To reduce insurance costs you should shop around for the best deal; consider buying a smaller car; pay your premium up front; park in a driveway or garage; consider a third party fire and theft policy if your car is low-value; and don't overestimate your mileage. Young female drivers, who are expected to be hit by soaring premiums following the recent European ruling banning the use of gender in underwriting, may benefit from the introduction of "black box" based policies which are based on the safety of a policyholder's driving habits.

Mortgages

Thanks to the Bank of England base rate staying at 0.5% for the past two years, monthly mortgage payments have dropped to their lowest levels in 10 years. The average mortgage borrower, according to the Council of Mortgage Lenders, owes £109,110 at an interest rate of 3.5%. The vast majority of mortgages are set up on a repayment basis, and the monthly premium for a loan this size would be £546.23. However, most experts expect the base rate to rise very soon, which will increase the cost of all variable rate deals. Each 0.25% rise in base rate will add £15 to a £109,110 repayment loan, according to moneysupermarket.com.

David Hollingworth of mortgage broker London & Country says most people will opt for a fixed rate to protect themselves against rises. Nationwide building society has a five-year fix at 4.39% with a 70% loan-to-value (LTV) ratio and £999 application fee, while Norwich & Peterborough building society has a five-year fix at 5.38% with an 85% LTV and £995 fee. However, those who are more confident that their finances can absorb some extra costs may prefer to take the risk that the base rate will rise slowly, opting instead for a tracker mortgage. HSBC's lifetime tracker is set at 1.79% above base and has an LTV of 60% and fee of £99.

Food

The FAO Food Price Index rose for the eighth month running in February, up 2.2% from January and at the highest level since January 1990 when the index began. In the UK, certain foods climbed in price at the beginning of the year as VAT rose from 17.5% to 20%, but other items - tea, ground coffee, butter, pasta, fruit juice, bread and vegetables - have shot up still further, according to mySupermarket.co.uk.

Dalia Mays, a spokeswoman for the site, says there to reduce the cost of the weekly shop. Try swapping your regular supermarket for a cheaper one: buy your staples at Asda rather than Sainsbury's or Waitrose. Try setting a budget and shopping online: it means you can buy everything you normally would but you won't be tempted by off-list extras. She adds: "Everyone has the brands they will never swap, such as Diet Coke or Heinz ketchup. But for things you're not too bothered about, try the supermarket own brand, or better still the supermarket value range."

Mysupermarket calculates the VAT increase will cost food shoppers an extra £66 in 2011 compared to 2010. But you can avoid VAT altogether by making crafty substitutions: buy tortilla chips instead of crisps, cream gateaux instead of arctic roll and chocolate chip biscuits instead of chocolate covered ones, unshelled salted nuts instead of shelled ones.

Utilities

Although households benefited from price cuts in 2009, the proportion of the household budget spent on energy rose substantially in 2010 thanks to freezing weather at the beginning and end of the year, and prices have risen by an average of 6.5% over the past 12 months. The average annual dual fuel bill was £819 in January 2008, but now stands at £1,132, according to uSwitch.com. Spokeswoman Ann Robinson said that if Ofgem considers current profits being made by energy companies as reasonable, and oil prices remain high, there is "a reasonable chance energy prices will go up later this year".

Consumers should check whether they can save money on bills and cut the amount of energy they use. Consider fitting an energy efficiency device to help reduce use, and turn things off when they are not in use. Insulating a home or installing an energy efficient boiler can produce longer-term savings.

Paying by direct debit each month will help reduce bills (suppliers offer discounts for paying this way) and consumers should make sure take regular meter readings as estimated bills can be disporportionately higher. Anyone who is concerned about paying their energy bills should contact their supplier to discuss the options.

Council Tax

The average band D household is expected to pay £1,438.87 for Council Tax in 2011, down 35p on last year, according to the Chartered Institute of Public Finance and Accountancy. The government has stumped up £650m to local authorities to allow them to freeze bills this year, although some are still imposing increases.

There's not much you can do to reduce the size of your Council Tax bill. But if you are the only adult in the household, you may qualify for a 25% discount. Other adults may be "disregarded", including full-time students, student nurses, young people on government training schemes or those following apprenticeships, and live in care workers. If everyone who lives in the property is disregarded there will still be a Council Tax bill, but it will be discounted by 50%. Check whether your household qualifies on the Citizens Advice website.

Credit cards

The most vulnerable to debt are those with children because they have less flexibility to reduce their expenditure, which means they are more likely to take out credit to meet living costs. If you want to reduce the interest you pay help may be at hand with MBNA's recent introduction of an 18-month 0% balance transfer card. This sparked a card price war with Virgin Money entering the fray with a deal to match the MBNA card. Barclays then stretched its own 0% interest period on balance transfers from 18 months to 20 months.

While the credit-scoring might be tougher on new cards, switching your debt to a card incurring no interest is a sensible move. Decent deals are also on offer from M&S (0% for 15 months) and Nationwide (0% for 17 months) - but make sure you compare the balance transfer fees and check the length of the offer for new purchases made on the card - the reversion interest rate is always markedly higher

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX. 

ARE YOU PAYING TOO MUCH COUNCIL TAX - CHECK HERE?