Families in Oxford will again pay more but get less for their money after an inflation-busting 4.5 per cent increase in council tax was passed.

The city council’s ruling Labour administration had proposed to increase the city’s share of the bill by 4.9 per cent.

However, councillors cut the rise after the Government warned it could cap authorities that failed to keep increases significantly lower than five per cent.

The increase means that from April a typical Band D homeowner in Oxford will pay a council tax bill of £1,528.02 — up £57 on last year.

The bill is made up of a £1,130.62 County Hall charge, a £151.27 Thames Valley Police precept and a city-wide charge of £246.13.

The rise in Oxford’s council tax comes as it was announced the key Consumer Prices Index measure of inflation had fallen to three per cent.

However, the Retail Price Index — which also takes into account a household’s mortgage costs — showed inflation had fallen from 0.9 per cent to 0.1 per cent.

The increases were criticised by Liberal Democrat councillors who again proposed a two per cent rise in council tax.

At Monday night’s meeting, there were 22 Labour councillors and 22 opposition councillors present.

One Liberal Democrat councillor was sick and the two Independent Working Class Association councillors missed the meeting.

As a result, opposition parties did not have the chance to debate the merits of their alternative budgets because the casting vote went to Oxford Lord Mayor and Labour councillor Susanna Pressel.

Labour councillors said the rise was justified as senior officers were forced to find £4.5m of savings — about 15 per cent of the authority’s budget — against a backdrop of a mounting economic pressure.

The concessionary bus pass scheme, which allows pensioners to travel on local services free of charge, is expected to cost the council £3.2m over the next three years, while the authority still has no idea if it will recoup any of the £4.5m it has tied up in Icelandic banks.

Liberal Democrat councillor Jim Campbell said: “We are in unchartered territory.

“If ever there was time not to increase Oxford’s council tax by 4.5 per cent this was it as people already have less money in their pocket.”

City councillor Ed Turner, board member for finance said: “We have set this budget in enormously challenging circumstances.

“None of us got involved in local politics to make savings, which we have to do in this budget.

“However, we have aimed to safeguard the council’s core services and I’m confident we are doing that.

“If anyone can name me a central Government department that has had to make this level of savings I will swim naked in the River Isis.”

Controversy erupted at the meeting after Labour pushed through their budget without further debate.

Councillors were prepared for lengthy budget negotiations as opposition groups hold more seats on the council. However, three councillors – Stuart Craft and Jane Lacey of the Independent Working Class Association and Liberal Democrat Clark Brundin who was recovering from a knee operation – were unable to attend.

With the numbers tied the casting vote was left to Lord Mayor Susanna Pressel who voted to pass the budget without further debate.

The lack of debate was too much for Green councillor Sushila Dhall who shouted: “You are dictators.”

Speaking after the meeting Ms Dhall said: “We don’t expect to set the budget as a minority group, but we expect to be listened to seriously.”

Ed Turner, member for finance, housing and strategic planning, said: “This budget has been the result of debate over the last six months.”

Other issues were decided at the meeting, including: Peers Sports Centre in Littlemore will close at the end of the month. The decision was taken after bosses at the new Oxford Academy admitted they had no plans for a swimming pool as part of their £32m redevelopment.

The Museum of Oxford will stay open until April 2010 after Labour councillors agreed to spend £90,000 to fund the facility for one final year. This halves the level of annual funding given to the museum and will see 10 members of staff lose their jobs.

City council-run car parks will see their standard charges increase by an average of 15 per cent. However, motorists parking in Gloucester Green will be forced to pay £1.80 more for a stay of between one and two hours on a Saturday — an increase of 38 per cent.

Oxford’s six area committees have had their funding slashed by more than half – to £150,000 – over the next three years.

Oxford’s team of uniformed street wardens will be cut from 15 to 14 to save £105,000 over three years.

The council has scrapped a plan to spend £50,000 on smartening up the Covered Market.