COUNCIL tax rises in East Dorset are set to be "above average" and close to eight per cent next year with finance chiefs warning they could stay high for the next three years.

District council officers say recycling costs and pensions will mean average increases of around 7.1 per cent until 2008/09 when they reckon the longer term picture will improve and rises of 3.5 per cent are predicted.

The hike would see the district's share of the council tax go from £147.70 for band D payers to £159.77.

Head of financial services Vic Smith said: "Provided that any growth in services is matched by compensating savings, and there are no changes to government funding, then these levels of council tax should be sufficient to fund services over the next five years."

He will warn policy and resources committee members on Wednesday there is a chance the government will cap local authorities as a means of controlling next year's budgets, although it is not known what criteria would be applied.

"It is a reasonable assumption that the same factors (as last year) would be applied but the exact limits are unknown," he wrote.

"While the government continues to refer to council taxes of 'low single figures' being required, it is not known what is meant by this.

"The same phrase was used a year ago and yet increases of up to 8.5 per cent were allowed."

And he added: "This council is likely to remain above average in terms of its level of council tax for 2005/06 and faces a budget increase of around 6.5 per cent. This means that we are likely to be dependent on the level chosen for the percentage increase in council tax to avoid capping."

Chief executive Alan Breakwell is expected to be asked to develop a contingency strategy to address possible capping next year.

First published: Sept 27