YORK'S Labour MP Hugh Bayley has weighed in to the debate over the city's council tax rise by warning "costs are running out of control".

Mr Bayley spoke out after senior members of the Liberal Democrat-controlled City of York Council proposed a 9.33 per cent council tax rise next year.

He said the proposed rise, which would take the council's share of the average, or Band D bill, to £852, could cause difficulties for pensioners and people on low incomes.

Once the police's 9.94 per cent precept rise and the as yet undecided fire authority precept is added the Band D bill jumps to more than £1,000.

Mr Bayley said: "When the Liberal Democrats won control of York council they started spending more money on all the promises they made to get elected, and now they are passing the bill onto council tax payers. There is nothing wrong with new schemes and policies, provided the council finds the money from making savings elsewhere.

"The problem with the Liberals is that it's all spend and no saving."

But council leader Steve Galloway hit back, saying Mr Bayley's comments were "politically motivated".

Coun Galloway said: "He is feeling vulnerable in his seat due to the election result last year.

"He is used to having things his own way and is now finding people are questioning his effectiveness."

He said Mr Bayley had been offered a one-to-one briefing on the council's finances by resources director Simon Wiles.

"I hope he takes up the offer so he is able to comment in an informed way," said Coun Galloway.

Recently released figures show that last year's council tax rise saw City of York Council toppled as Yorkshire's lowest-charging auth-ority.

The then Labour-controlled council approved a tax rise of slightly less than six per cent last year. Leeds City Council charged £985 for a Band D bill while York charged £988. Sheffield topped the tree with £1,155 for a Band D home.

The figures include the police and fire authority's share of the bill, as well as the council's.

The average council tax for the Yorkshire and Humber region remained the lowest in the country, at £786 per home.

The south-east saw the highest charges, with bills at an average of £1,026.

Finance boss shoots down council tax myths

THE majority of the money a council spends each year comes directly from the Government in a grant.

But councils are left to make up the shortfall themselves through council tax.

This community-based tax often attracts criticism from disgruntled local taxpayers, who feel their council is charging too much.

But city council resources boss Simon Wiles claimed that York taxpayers pay between £100 and £150 less than their Yorkshire neighbours.

"York already has, and will continue to have, one of the lowest council tax levels in England," Mr Wiles said.

He pointed to the recent "Good" rating the city council was awarded by a Government watchdog.

This meant the council delivered better than average services for "considerably below average" council tax levels.

Mr Wiles added: "Gross council spending is over £300m of which council tax payers contribute about £55m, but spend per head of population in York is the lowest of all 50 comparable and neighbouring councils."

Mr Wiles said there are several "myths" attached to local taxation. He attempts to tackle them here:

"The council benefits financially from new businesses in York."

This is incorrect. The business rates collected by the city council are all handed straight to central government.

The council is merely a billing and collection agent.

"The council benefits from all the new houses and flats in York."

The council tax paid by all York's residential properties is taken into account by the Government in deciding how much grant to give to the council.

"The Council is spendthrift/wasteful."

While any large organisation should be able to find further economies and efficiencies, which is exactly what the leading councillors and officers are striving to do, the facts set out earlier demonstrate that overall the council is economically and efficiently run.

The council has had a comparably low council tax for many years now. This has meant low funding of many services. Some services and costs must increase.

Updated: 08:32 Friday, February 13, 2004