Households in Warwick district will pay an extra 2.5 per cent on their council tax bill towards services including refuse collection, car parking and social housing.

Warwick District Council's budget for the 12 months from April was passed without opposition at the authority's meeting on Wednesday.

The rise is 0.7 per cent above the national average of 1.8 per cent reported on Tuesday by the Chartered Institute for Public Finance and Accountancy and will bring the amount an average band D household pays the authority over the year to £146.86.

Council leader Cllr Michael Doody said the rise was the council's lowest this century, and was based on planning for the next five years, adding that he hoped the increase would be the same or less over the whole period.

Cllr Doody (Con, Radford Semele) explained the council had saved money by not replacing staff when they left, and would be adding £100,000 to the rural initiatives scheme.

He said: "In a time of recession it is important that the budget is sustainable over a long period."

Cllr Andrew Mobbs (Con, Kenilworth Park Hill) said it was one per cent less than the rate of inflation for January.

He said: "We have struck the right balance to achieve a fair deal for residents and the work that needs to be done to balance the budget for many years without reducing services."

Liberal Democrat group leader Cllr Alan Boad pointed out the increase was above the national average and below the expected capping level.

He pointed out that all the council's major projects had begun under the previous Labour and Liberal Democrat council, although he later admitted there were few opportunities for new schemes.

In "tough times", Cllr Boad (Leamington Crown) added the council was "lucky" to have been able to shed jobs by natural wastage and not redundancies.

He also claimed a proposed merger of senior management teams at Warwick and Stratford district councils could save up to £500,000, adding: "If we can pull it off it will help significantly."

Cllr Richard Edwards (Lab, Willes) congratulated the administration for not making the rise a "crude electioneering gimmick" and said the council had to look for "wiser" ways of spending money and looking for savings.

He warned the council against making its budget improvement programme a "Trojan horse" for cutting services for vulnerable people.

Closing the debate, Cllr Doody said he had not mentioned cuts. He added: "It's my intention not to make any cuts."

The average band D council tax bill in Warwick district for the 12 months from April is £1498.79, compared to an average for England of £1,438.75.

• SEE today's Courier for a full breakdown of your council tax bill.