COUNCIL tax may have to rise to plug a £4m black hole in town hall finances opened up by the housing slump, the Tories claimed yesterday.

The party unearthed figures revealing how much local authoritys have been hit by the property market crash.

Town halls in the North- East and North Yorkshire reported that they expected to lose £2.23m in land charges – fees paid by homebuyers researching the planning history of a property.

A further £1.73m was forecast to disappear from revenues coming in from planning fees, charged for planning permission for new developments, extensions and conversions – making a total loss of £3.96m Grant Shapps, the Conservative housing spokesman, said: “Local authorities up and down the country are facing up to the hidden costs of Gordon Brown’s boom and bust.

“This black hole in local government finance is extremely worrying as it means potentially higher council taxes and increased fees.”

The figures, uncovered by the Tories using freedom of information requests, suggest Stockton Borough Council ouncil will be the worst hit of the local authorities that replied. Stockton said it expected to lose £230,000 in land charges in the last financial year, plus a further £300,000 in planning fees – making a total loss of £530,000.

Also suffering were: Redcar and Cleveland (total loss, £317,500); Durham City (£251, 544); Derwentside (£235,000); Sunderland (£196,929); and Easington (£185,000).

In North Yorkshire, the biggest expected losses were reported by Hambleton council (£200,000), followed by York (£176,000) and Harrogate (£150,000).

The overall regional loss may be much larger than £4m, as many authorities did not provide a figure for planning fees, and some did not reply.

No council expects to be hit as hard as the worst affected – Birmingham (£2.03m), Bristol (£1.98m) and Newham, in London (£1.81m). The total predicted deficit was £94.1m.

The average home was worth £152,898 in April, according to the Land Registry – down by £29,659 over the past year, or 16.2 per cent.

Recent surveys suggest the slump is slowing down but, with lenders still rationing their lending to new and existing borrowers, sales are still far lower than 12 months ago.