by political editor Paul Francis

Council taxpayers face a 2.1 per cent hike in their bills this year after the county council confirmed its spending plans for the year.

The increase was voted through at the authority's annual budget meeting today.

The increase means average bills for householders in Band D homes will rise to £1,047.78 up £22.39 on last year.

KCC's Conservative administration said the increase was the lowest in the 17 years of the council tax.

A last-minute agreement with the Government over money KCC was owed to meet the costs of looking after asylum seekers means a planned increase of 2.4 per cent to cover the outstanding sum was dropped.

Ministers agreed to KCC demands to repay about three quarters of £4million that the council has incurred in asylum costs.

The county council, which has an annual budget of some £2.2billion, had wanted to set a tax rise of 1.86 per cent but said it could only do so if the Government agreed to re-imburse grants outstanding for looking after asylum seekers.

KCC leader Cllr Paul carter said the authority's spending plans were against a backdrop of a continuing squeeze on the public sector. He said despite inadequate Government grants, KCC's budget was "sensible, pragmatic and practical based on our track record of excellence".

The increase of 2.1 per cent was among the lowest being set by similar authorities, he added. "I believe we are setting a fit and appropriate budget for this year."

But he warned that while this year's budget would safeguard key services the following two years would be more uncertain. "The next two years would be a step into the unknown [because] we do not know what a new Government will impose on us."

Opposition Liberal Democrat leader Cllr Trudy Dean said her party would be putting forward measures that would allow there to be a freeze on council tax levels. These included the scrapping of KCC's 'Healthwatch' initiative.

"Our view is that it is not our job in the current climate to put additional burdens on to residents," she said.

Cllr Les Christie (Labour) said the Conservative administration could not claim to have been shortchanged by the Government and at the same time propose a low council tax increase. "The administration cannot have it all ways," he said.

The council has pledged that if the money is eventually recouped, KCC will consider cutting bills by the relevant amount next year.

Despite an increase in Government grants of 3.2 per cent, KCC says that amounts to less than £8.5million, well short of what it says is needed to meet a rising demand for key services.

As part of its budget plans for 2010-2011, the council will provide an additional £6.5million to support vulnerable adults,; £5.3million to strengthen childrens social services to meet an to meet the 21.2% increase in referrals in the wake of the tragic Baby Peter case, plus £10m to meet the additional costs supporting a £1.5billion capital programme

The meeting will also confirm that KCC staff will also be given no pay rise this year.