Eight local authorities in England are having their budgets capped this year and will need to set lower council taxes, Local Government Minister Phil Woolas has announced.

The authorities being capped are Aylesbury Vale, Daventry, Hambleton, Huntingdonshire, Mid Bedfordshire, North Dorset, Runnymede and South Cambridgeshire.

Additionally for one local authority – Sedgemoor District Council - ministers propose to set a notional budget for this year against which future increases will be measured for capping purposes.

In a Written Statement to Parliament, Phil Woolas said: "We are keeping our promise to protect council taxpayers against excessive increases."

"Given that we have increased funding to local government by 33 per cent in real terms since 1997, and that all authorities have received formula grant increases either in line with or above inflation in all of the last three years, there is no excuse for excessive council tax increases."

However, the Local Government Association said it was "dismayed at the capping stupidity" as councils were now faced with having to resend their bills because of the government’s decision. All of them are low-spending authorities, with Band D council tax bills that are lower than average, said the LGA.

Sir Sandy Bruce-Lockhart, LGA Chairman, said: "We are dismayed that the government has ignored common sense and ridden roughshod over the wishes of local people, literally for a few paltry pence a week. This is centralised stupidity."