COUNCIL tax in Manchester is to go up by just 2.5 per cent.

And council tenants in the city could also benefit from a rent freeze for 2004/05.

For the fifth successive year, the ruling Labour group has proposed a council tax increase at or below the rate of inflation. The 2.5 per cent rise would be among the lowest in the north west and complete Manchester's move from one of the region's highest council tax zones to one of the cheapest.

Sue Murphy, the council's executive member for finance, said: "At the same time as keeping any increase low, I will be proposing that we spend extra money on social services to help protect vulnerable people, old and young, in Manchester.

"I will also be recommending that the increase in money for education from the Labour government is passed directly to schools."

With elections in June for every council seat in Greater Manchester, council tax is increasingly seen as a make-or-break issue.

Review

Salford's Labour leaders are set to increase council tax by 3.5 per cent despite being told in November they would get the minimum government grant. The Conservative opposition has warned the decision would bring huge hikes next year.

The council executive in Manchester is likely to agree later this month to freeze rents for more than 50,000 tenants, following a government review of subsidies to manage and maintain council homes.

Basil Curley, executive member for housing, said: "We have been lobbying for some time for changes which better reflect how much it cost for the city to run its excellent housing service.

"Our prudent management and a windfall provided by central government means that our tenants will see their rents pegged at current levels for next year.

"In addition we'll be able to put an extra £500,000 into improving the local environment on our estates."

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