The average Band D council tax bill is set to soar past £2,000 for the first time ever under plans that could be unveiled in the Autumn Statement.
It's understood Chancellor Jeremy Hunt has looked at loosening the requirement for town, county and city halls to hold local referendums before raising the charge.
According to the Telegraph they will scrap the current "referendum cap" - a 2.99% rise in council tax - and allow a 4.99% rise instead.
That would mean millions of households in Band D were hit by rises of nearly £100 in April 2023 - another major blow for millions of Brits already struggling with rising energy prices and living costs.
Average Band D council tax bills are already £1,966 - after shooting up by more than £500 a year since the Tories took power in 2010. That means they are almost guaranteed to top £2,000 in April.
Sources in the Treasury say the measure would allow councils "more flexibility" to increase revenue to pay for rising social care costs.
But the Local Government Association has previously warned authorities would have to raise council tax by “well over 10%” if a current black hole is filled by tax hikes alone.
The move would also break a promise made in the 2019 Conservative Party manifesto, which pledged to keep the current rate and said local people would continue to "have the final say” on increases in council tax.
The Local Government Association warned authorities would have to raise council tax by “well over 10%” if a current black hole is filled by tax hikes alone.
That would be “neither sustainable nor desirable given the current cost of living crisis”, the body representing 350 councils warned.
Councils are already facing a £2.4bn gap in their budgets this year since they were set in Autumn, due to inflation and rising minimum wage.
An LGA spokesperson said: “While council tax is an important funding stream, it has never been the solution to the long-term pressures facing councils.”
It raises “different amounts in different parts of the country – unrelated to need - and [adds] to the financial pressures facing households.”
The County Councils Network said its members were “grappling with £3.5bn in inflationary and demand costs this year and next” but warned many families “continue to be impacted by the cost-of-living crisis.
“Large-scale council tax rises are not the answer to the scale of the financial challenges councils face, and would be unfair and unacceptable for residents.
“Therefore, the priority should be for government to allocate more funding for councils in the Autumn Statement.”
The council tax reform is just one of a number eye-watering taxes and cuts expected to be announced by Jeremy Hunt later in the week, who has warned "we will be asking everyone for sacrifices" as the nation faces "difficult decisions".
Reports suggest he could cut the £150,000 threshold for 45p tax to £125,000 to generate £1.3billion a year, and cut energy bills support from £60bn in the current six months to just £20bn in the six months afterwards.
Mr Hunt told Sky’s Sophy Ridge on Sunday: “We don't want anyone not to be able to afford to heat their home over this winter or indeed future winters.
"But in the long run, what you need is a plan that means we don't need to have to give very, very expensive support as taxpayers.”
He said his plan announced in Thursday’s Budget statement “will continue to support families” but it will not be “uncapped” or “unlimited”.
