More than four million people are facing punishing council tax rises above the maximum normally allowed by law.
Householders in one area could see their bills hiked by 25 per cent – the largest increase in England for two decades.
Seven other struggling councils around the country have proposed huge rises of between 9.99 and 15 per cent from April as they look to exploit a legal loophole, piling pressure on already under strain domestic finances.
Local authorities are permitted to raise council tax by up to 4.99 per cent under Government rules.
Any larger increase than this would normally have to be approved by a referendum of local taxpayers – something that has never happened because councillors know how unpopular the move would be.
But councils can exploit a loophole with the threat of issuing a so-called Section 114 notice, effectively declaring themselves bankrupt and allowing them to go for higher rises, which would be signed off by Angela Rayner in her role as Secretary of State for Housing, Communities and Local Government.
Some 4.4million residents in eight local authorities are set suffer this fate, a Mail audit has uncovered, sparking new questions over the mismanagement of public money.
Benjamin Elks, from the TaxPayers’ Alliance campaign group, said: ‘Local taxpayers are fed up with having to pick up the tab for reckless councils.
Deputy Prime Minister Angela Rayner leaves Downing Street after a weekly Cabinet Meeting
Householders in one area could see their bills hiked by 25 per cent – the largest increase in England for two decades – to fund local services like bin collections (pictured)
Local people protest outside of Croydon Town Hall on March 1, 2023 in Croydon, England. The protest is part of a campaign to stop Mayor Jason Perry’s 15 per cent Council Tax hike
‘As hard-working households across the country tighten their belts, local authorities are refusing to rein in their out of control spending, squandering cash on pointless pet projects.
‘It’s high time town halls focused on delivering core services efficiently, not asking local residents to keep funding their dangerous addiction to spending.’
The 154,000 residents of the Royal Borough of Windsor and Maidenhead in Berkshire, which includes the Royal family on the Windsor estate, are facing the biggest council tax rise in the country – five times the usual maximum, adding £451 to the average cost.
The Lib Dem-run local authority is looking to force through a 25 per cent increase, which would be the largest for two decades in England if ultimately approved by ministers.
Tory Opposition leader councillor Maureen Hunt said: ‘Residents are up in arms – this is a huge amount to increase tax by during a cost of living crisis – it’s heartbreaking for many and a very drastic increase.’
Labour’s flagship local authority Birmingham is considering raising council tax by 9.99 per cent for a second consecutive year as it tries to recover from disastrous handling of its finances in the past. If the rise goes ahead then Band D Council Tax payers in England’s second city will see their bills rise by a combined £400 over the two-year period.
Labour-run Bradford council, which was bailed out by the government to the tune of £220million last year and is currently the UK City of Culture, has also asked for permission to increase tax by up to 15 per cent from April for its 560,000 residents, putting around £170 on the average bill.
In December, Lib Dem-lead North Somerset Council also proposed a 15 per cent rise in council tax, putting it by an average of £256 a year, as well as asking its 215,000 residents if they would donate £1,000 to help fill the authority’s multi-million funding gap.
Residents in Windsor & Maidenhead are facing a 25 per cent council tax hike (pictured: Maidenhead town hall)
The 154,000 residents of the Royal Borough of Windsor and Maidenhead in Berkshire includes the Royal family on the Windsor estate (pictured: Windsor Castle)
Birmingham City Council is considering raising council tax by 9.99 per cent for a second consecutive year (pictured: Birmingham City Council House)
Hampshire County Council, which faces a £182million deficit and has 1.4million residents, has asked ministers for permission to hike council tax by 15 per cent in 2025/26, adding £230 to the bill of a Band D property.
In a letter to county councillors, the authority’s chief executive Carolyn Williamson said the request is a ‘proactive, pre-emptive step’ by the council to secure ‘greater resilience’.
By 2026/27, she said, the prospect of having to issue a Section 114 notice ‘becomes a real possibility if there are no deep-seated changes to the way local government is funded’.
Huge rises are also being planned by the London borough of Newham, the Labour and independent coalition of Cheshire East and Tory-run Slough, which has already hiked by more than 5 per cent for the last two years.
A spokesman for the Local Government Association said: ‘Many councils have faced the tough choice about whether to increase bills to bring in desperately-needed funding to provide services at a time when they are acutely aware of the significant burden that could place on some households.
Local authorities are permitted to raise council tax by up to 4.99 per cent under Government rules (file image)
‘However, while council tax is an important funding stream, the significant financial pressures facing local services cannot be met by council tax income alone. It also raises different amounts in different parts of the country – unrelated to need.
‘Councils need a significant change in our funding to stabilise local government finances so we can deliver the services local people want to see.’
A spokesman for the Ministry of Housing, Communities and Local Government said: ‘No decisions have been made on council tax increases and we will only consider agreeing to requests for rises above 5% in exceptional circumstances, in line with the previous government’s position.
‘Councils are ultimately responsible for setting their own council tax, and we will put taxpayers at the forefront of any decision.’
