COUNCIL tax bills in York will not be rising by £100 next year, the city's council leader assured residents today.

But Coun Steve Galloway said he did agree with a Local Government Association (LGA) report which claimed that council budgets were being put under huge pressure by a £2.2 billion black hole caused by the Government.

The LGA warned that householders may have to pick up a huge bill if Ministers did not bail out local authorities, who are under pressure from increasing costs in services.

Whitehall demands are costing councils an additional £2.8 billion a year, as more cash must be spent on waste management, children's and elderly services.

The LGA says the Government is not stumping up to help councils meet their increased commitments - with association chairman Sir Sandy Bruce-Lockhart warning a ten per cent council tax rise, or £100 on an average bill, may be needed to plug the gap.

Coun Galloway said York's position - the authority has a funding gap of £10 million next year -- was "exacerbated" by increased demand for services, and the constraints of being one of the lowest charging authorities for council tax.

"We are expecting to make some genuine efficiency savings. There will be some increase in council tax. Our difficulty is the remaining figure," he said.

"Even after a favourable grant settlement, we know there will be an issue of several million still to address. Unless the Government reassesses the grants to all councils, which would benefit us, we could have some difficult decisions to make.

"There is no question of council tax in York going up by £100. That's partly because York has one of the lowest council taxes in the country."

The council, through its Fair Grant For York campaign, is arguing that the city should be given a Government grant which allows it to run the authority without having to cut services.

Ryedale District Council's policy and resources committee last month pledged that any council tax rise would be "no higher than inflation".

Today, committee chairman Coun Robert Wainwright told the Evening Press: "In some ways this figure of £100 is just scaremongering. We have already decided to limit our increase to the rate of inflation - and that is a testament to our good book-keeping, and being able to provide services at a reasonable cost to our rate payers."

Updated: 10:32 Thursday, November 03, 2005