COUNCIL tax bills in the least populated district in England will rise just £3.46 this year - despite a near £1 million drop in funding from central government.

The rise for Eden District Council’s share of the council tax, represents a 7p a week increase or a percentage rise of just 1.99 per cent.

It also represents the authority’s first rise since 2010 and is below inflation.

Eden is home to around 52,500 residents and no single party is in overall control of the district council which met last week to agree its £7 million budget.

In December, when the government told local councils the amounts they would receive from central coffers, Eden said it was ‘dismayed’ that its £3.2 million share represented nearly a £1 million shortfall compared to previous years.

It was later given a special grant of £67,421 in ‘recognition of the additional costs’ of providing services in a sparsely populated area.

Having agreed the budget, council leader, Coun Gordon Nicolson, commented: “Our budget proposals for 2013-14 protect our services and take forward our plans for attracting new businesses and promoting job creation and growth.

“We have frozen our car parking charges. The increase we are proposing is less than inflation. If we do not increase our Council Tax income by this small amount it will be difficult to maintain our existing services in future years.”

He added: “The budget agreed is the result of long and hard deliberations by all councillors. It is a budget for the future and is possible because of the decisions taken last year on our establishment costs and the costs of contracts. Sound financial management remains our priority.”

Coun Nicolson added that it was important the authority developed ‘new revenue streams’ and reduced its dependence on ‘diminishing government grants’.

Councillor Kevin Beaty, the council’s resources portfolio holder, said it had worked hard over the previous two years to restructure and avoid cuts.

Coun Beaty said: “Over the past two years, we have restructured the council and made our savings before now which is why we don’t have to raise it very much. It has also prevented big hikes in council tax in the coming three years too. It's 7p per household, not per person."

Coun Beaty added: “Government funding of councils continues to be unfairly distributed. Urban councils get higher funding than rural councils. We are working with our MP (Rory Stewart, Penrith and the Border) and other rural councils to tackle this."

“We have had to work hard over the last few years to meet the challenges of the national funding reductions and the underfunding of rural councils. I am delighted that, despite recent cuts from Central Government, we are meeting the challenges and are able to propose a sound budget which protects and enhances our services.”