UNFORTUNATELY Mr Fairclough repeats the popular misconception that the council is financially benefiting from extra council tax income from new flats and houses built in York (Letters, November 17).

The reality of the situation is that while every extra 1,000 properties may raise income of about £900,000 per year, this is more than offset by the costs of providing extra services such as refuse collection, education, street cleaning etc.

Moreover, the Government adjusts downwards the grant funding it gives to the council in anticipation of an even higher level of council tax being charged on these properties than we are actually allowed to charge.

By our calculations, the council loses out by an average of over £100 per year for every new property built in York. Furthermore, the council gets no financial benefit from commercial properties as all the business rates that we collect have to be handed straight to the Government.

There is no financial incentive in terms of council tax or business rates for the council to grant planning permission for flats and houses.

Simon Wiles,

Director of resources,

City of York council,

Library Square, York.

Updated: 10:19 Tuesday, November 23, 2004