Councils rage at 'doing Government's dirty work' with potential council tax threshold increases

Chancellor Jeremy Hunt could today announce that councils will be allowed to increase bills by 4.99 per cent without the need for a local referendum.

Under current rules, councils responsible for social care can increase their bills by a maximum of 1.99 per cent with a further levy being for social care.

Any further increases above the threshold would trigger a vote in the area where people would be able to have their say on whether the bills should rise.

But it is believed Mr Hunt is to increase this threshold in today's Autumn Statement – a move met with criticism by Walsall and Wolverhampton bosses.

Conservative Councillor Mike Bird, who heads up Walsall Council, said: "We will have to consider it (if the threshold is increased), but I have to say this as a long-serving Conservative councillor – we're having to do the dirty work for the Government which has dropped us in it again.

"We're budgeting at the current level of council tax, but the situation is extremely difficult – they need to understand the pressure on adult and children services local authorities face. The answer is not to increase council tax, but to give us more money because these services are needs-led. We don't have any choice, we have to look after our elderly and our children."

Mr Bird said authorities were left picking up the bill, adding: "Whilst I appreciate the flexibility around council tax, I would hope we can go forward without increasing it because people are really struggling as it is.

"We've got a gap of £11m so far but we're confident we can balance the books this year, but we can't see into the future and what the Government should be looking at is a five-year settlement to give councils some stability – one year does not help."

Meanwhile Labour councillor Stephen Simkins, deputy leader at Wolverhampton Council, echoed the sentiment – and said Government would likely factor in the possible five per cent rise when calculating how much funding to hand out to councils moving forward, putting authorities and people in a difficult situation.

He said: "If they do say it will be a five per cent increase, that will be devastating for us because as this recession deepens and widens how will people pay their bills? What will be people's priority – buying food for their children or paying their council tax bill?

"We've suffered funding cuts for 12 years now and you've got certain politicians saying 'spend your reserves' but if we do, how are we going to protect the people in the city? There needs to be fairer funding set over a number of years. Give it to us and we will deliver."

The Chancellor has previously hinted at the change during a discussion in the House of Commons, in which he said they will "be asking people who have more to contribute even more" and this "will be reflected in our decisions on council tax".

The admission followed a question from Labour MP Chris Bryant, who said schools and councils were in real fear of going bust due to rising energy bills and inflation costs surrounding food.

But Mr Hunt replied: "I do hear what the right honourable gentleman says and it is going to be a very difficult announcement on Thursday because we are going to be asking everyone to contribute more.

"But we'll be asking people who have more to contribute even more. And that will be reflected in our decisions on council tax and every other tax as well."