Families throughout England are bracing for yet another round of rising expenses, as many local councils prepare to implement council tax increases that exceed inflation starting in April.

In a move that promises to add pressure on already financially stretched households, several councils have announced plans to elevate council tax by the maximum permissible rate of 4.99 percent for the fiscal year 2026/27.

Some financially strained councils are even contemplating requesting government approval to exceed this limit, with one local authority potentially considering an unprecedented 20 percent hike.

Under current regulations, a 4.99 percent increase is the highest annual council tax rise allowed without necessitating a local referendum. This cap consists of a 2.99 percent allowance for general expenditures and an additional 2 percent designated for adult social care.

Last year, amidst a financial crisis affecting local governments, six councils received ministerial approval to implement council tax increases exceeding the cap, with some hikes reaching as high as 10 percent.

Last year, amid the debt crisis within local government, six councils were permitted by ministers to go ahead with cap-busting council tax increases of up to 10 per cent.

With local authorities currently putting together their budget proposals for the next financial year, a large number have proposed a 4.99 per cent increase – above the latest CPI rate of inflation at 3.2 per cent.

But residents in North Somerset and Warrington are poised to be hit by an even larger bills hike.

At a meeting last month, North Somerset Council leader Mike Bell warned there was ‘no painless option left’ for local residents as the local authority seeks to raise council tax above 4.99 per cent.

‘Higher council tax rises are now unavoidable if we are to keep essential services running and avoid a financial crisis that would do far more damage to our communities,’ the Liberal Democrat councillor said.

He added there was a real risk of North Somerset Council declaring effective bankruptcy without higher-than-usual council tax rises.

Mr Bell had previously told the BBC that even a 20 per cent increase in council tax maybe ‘wouldn’t be enough’. 

Warrington Council is also considering asking the Government for permission to increase council tax above the 4.99 per cent limit.

Denis Mathews, cabinet member for finance, assets and investments, said the local authority was facing ‘the most difficult budget position’ in its history.

‘It is an unprecedented financial challenge,’ the Labour councillor said.

‘Put simply, the money we receive in income, is far less than what we are spending on services.

‘This huge gap will need to be bridged, through making widespread service changes as a council, but also through seeking additional financial support from Government, which will buy us time to put things right.’

Shropshire Council is proposing a 4.99 per cent increase in council tax.

But it is also consulting local residents on higher increases as part of its budget process for 2026/27.

The consultation asks, if given permission by the Government, whether residents would agree with it hiking council tax by 6.99 per cent, 9.99 per cent, or 14.99 per cent.

Roger Evans, cabinet member for finance, said: ‘Councils across the country are facing significant financial pressures, and we are no exception.

‘While there’s lots of things we’re doing to stop and reduce spending and improve the way we work, this is not enough.

‘As well as our ask to borrow money from the Government, we must take difficult decisions to set a balanced budget.’

It previously emerged how Kent County Council, led by Reform UK, is set to hike council tax by the maximum 4.99 per cent amid claims a cost-cutting drive had failed.

The local authority was one of 10 English councils that Nigel Farage’s party seized control of at May’s local elections.

Reform’s success at the ballot box was followed by promises it would slash ‘wasteful’ spending by councils across the country.

The party established a ‘DOGE’ unit – based on the Department of Government Efficiency set up by Elon Musk in the US – to try and cut costs.

But Reform members of Kent County Council admitted they had been unable to find areas for huge savings and would likely have to hike council tax.

Diane Morton, Reform’s cabinet member for adult social care, told the Financial Times that services in Kent were already ‘down to the bare bones’.

‘We’ve got more demand than ever before and it’s growing,’ she said. ‘We just want more money.’

She added of an expected increase in council tax in Kent: ‘I think it’s going to be 5 per cent.’