Council tax bills will go up by an average of 3.5% in April, according to the Local Government Association (LGA).

The figures, based on draft saving and investment budgets prepared by over a quarter of the country’s local authorities, would represent the second lowest rise since council tax was introduced.

The rise would add a touch less than £45 to the average Band D bill of £1,268.

However, taking local authorities individually, some are actually reducing their charge. Hammersmith and Fulham, for example, an inner London borough controlled by the Tories, is planning to reduce its charge by 3.5%.

But the LGA survey also shows that some county councils are putting up their charge by 4.9%, just below the level at which the Government would cap their rate. The main reasons cited for these increases are that the councils affected need to make saving and investment on a scale only allowed by this level of charging.

One council, Tory-run Tewkesbury in Gloucestershire, was even considering a rise above the limit, although this would bring it into conflict with the Government.

LGA chairperson Lord Bruce-Lockhart said: “Without additional funding to make adequate saving and investment, local government may potentially face a situation, by as early as 2009, where it cannot afford to provide support to the 370,000 people lower levels of need.”