MEDWAY Council will not be capped by the Government for exceeding the ceiling ordered on council tax increases, it has been announced.

The council had approved an increase of 5.5 per cent. Capping would have meant a new council budget and a probable cut-back in services.

The council will spend just under £300 million during the next financial year.

Council finance chiefs were furious that Medway might be penalised for a council tax increase which still meant that residents were paying much less than elsewhere in the UK.

The announcement that Medway will not be capped follows determined efforts by the council to persuade the Government not to go ahead with its threat.

The council submitted a formal appeal back in April and council chiefs met Local Government Minister Phil Woolas to put their case.

They pointed out that Medway has the third lowest unitary authority council tax in the UK and its average band D council tax rate is considerably cheaper than all other councils in Kent, being some £140 less than the average

Council leader Cllr Rodney Chambers said: "Common sense has prevailed. This is the only outcome that we could reasonably have contemplated given the sensible way in which the council spends taxpayers’ money.

"We have, and will, continue to deliver services that are efficient and effective and it justifies our earlier decision to set a budget that reflects our local priorities.

“I believe all our earlier budgetary decisions are entirely vindicated by this announcement. It is right we should have the freedom to determine appropriate levels of council tax to meet the needs of the local community.”