Northamptonshire CC has been given the freedom to increase council tax by 2% more than other local authorities without holding a referendum, it was announced today.

In the final local government finance settlement, communities secretary James Brokenshire said the troubled county would be given the extra flexibility to help improve its governance and services.

Lead commissioner Tony McArdle said the council was 'on track' to balance its budget even without the extra flexibility but it could be used to accelerate the 'pace of the improvements we are making'.

He added: ‘We, as commissioners, haven't asked for this but it will be for the council to decide whether to take up the offer of an extra 2% on council tax.'

Mr Brokenshire refused to remove the current council tax referendum limits for other local authorities, which will remain at up to 3%.

He said: ‘During the consultation, many local authorities called for referendum limits to be removed.

'However, I believe the proposed limits allow local authorities to retain the flexibility to raise additional resources locally to address local needs while protecting households from excessive increases in council tax, in line with the Government's manifesto pledge.'

The Local Government Association (LGA) warned councils still faced a £3bn funding gap this year.

LGA chairman Lord Porter said: ‘The money councils have to provide local services is running out fast and there is huge uncertainty about how they will pay for them into the next decade and beyond.'