COUNCIL taxes may have to rise to plug a £2m "black hole" caused by the housing slump, the Tories claimed last night.

They produced new figures revealing just how much local authority finances across the region had been hit by the ongoing property market crash.

Councils in Merseyside, north Cheshire and West Lancashire reported that they expected to lose £0.72m in land charges – fees paid by homebuyers who are keen to research the planning history of a property.

A further £1.19m was forecast to disappear from revenues from planning fees, charged for planning permission for new developments, extensions and conversions – making a total loss of £1.91m.

Furthermore, the overall loss is likely to be much larger, because many authorities only provided one figure – while Wirral, St Helens, Cheshire County and Chester City did not reply at all.

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."

But Liverpool City Council – which expected to lose £319,217 – dismissed any fears of a council tax hike, insisting it had "accounted for this in our budget forecasts".

A spokesman added: "In common with every local authority, Liverpool has seen a drop in income from planning applications and land charges due to the impact of the credit crunch.

"We expect income will increase again when the recovery starts and confidence returns to the housing and commercial property market."