By Victoria Huntley COUNCIL tax is due for a below inflation increase to help Tower Hamlets residents cope with the recession in the next financial year, council leaders have agreed. Members of Tower Hamlets council s decision-making cabinet agreed the i

By Victoria Huntley

COUNCIL tax is due for a below inflation increase to help Tower Hamlets residents cope with the recession in the next financial year, council leaders have agreed.

Members of Tower Hamlets council's decision-making cabinet agreed the inflation-busting 1.69 per cent increase at a meeting last night (Wednesday).

The raise represents an increase at almost half the rate of inflation - which is currently set by the Bank of England at 3.1 per cent - and will equate to an average additional payment of �15 for the year 2009-10 compared to 2008-09.

Cabinet members were presented with three options by the Town Hall's finance heads but shunned the ideas of keeping council tax at the same rate as 2008-09, increasing it by two-and-a-half per cent or four per cent.

The yearly council tax due on an average 'Band D' property will go up from �865.64 to �880.64 starting on April 1 this year.

But Tower Hamlets council now expects its residents to make more but lower payments to "make budgeting easier" for households.

Finance cabinet member Cllr Josh Peck said: "People are concerned that the pound in their pocket is not going as far as it used to so we hope that with this below inflation increase we can help people while they are feeling the pinch.

"Although council tax itself is going up, we want to help people in these times of recession.

"We know that people in Tower Hamlets budget week by week and month by month so we want to make sure we can help people do that.

"Council tax payments were previously spread over 10 months but in the next financial year we will be spreading it over 12 months so people will make more payments but the payment each month will be less.