Surrey CC has announced proposals to increase council tax to the maximum level without triggering a local referendum, citing the prohibitive £2m costs of going to the polls.

Surrey leader Cllr David Hodge last night said: ‘We are driving unit costs to some of the lowest level in the country.'

'But despite this, the reducing government grant and rising demand for services we have no choice but to reluctantly raise council tax by 1.99%.

‘We all know this will be tough for some of our residents, something I deeply regret.'

Cllr Hodge, Conservative leader of Surrey, has been outspoken in stating his wish to have the freedom to set council tax levels for the authority without the constraints of an unsustainable and costly local referendum.

He added there was no choice due to demographic pressures.  The number of vulnerable adults needing help in Surrey is set to increase by 1,000 over the next three years at a cost of £25m, and a leap in pupil numbers requiring additional £327m schools expenditure by 2019.

‘Anything more than 1.99% will result in a referendum costing Surrey taxpayers as much as £2m,' Cllr Hodge said.

He added it would be ‘irresponsible' to saddle taxpayers with this cost for the sake of an additional 0.5% rise in council tax levels.

In contrast, Essex CC last night ratified its budget and agreed to freeze council tax for a fourth successive year – despite having originally proposed a 1.49% increase.

However, Essex was able to scrap an increase after last week receiving figures showing the county had derived additional extra growth from the county's borough, district and city council from an increase in business rate yields and improved council tax collection rates.

Essex leader, Cllr David Finch, said the council had passed a budget of ‘difficult choices' with further tough decisions needed to help deliver £235m savings by 2017 - £107m of which must be made in the next financial year.

‘The council cannot therefore avoid taking difficult decisions now in the naïve hope that the next government will be able to give us more money,' Cllr Finch said.

Elsewhere, Birmingham City Council leader Sir Albert Bore has claimed central grant cuts and other pressures mean the authority must identify a further £85.7m of cuts in its 2014/15 budget.

Commenting on the authority's forward budget plan for 2014 onwards, Sir Albert said Britain's largest council would next year have to make more than £200m savings – a figure equivalent to more than half the £375m savings made in the four years from 2010 to 2014.

‘We rely on central government for most of our income – only about a tenth comes from Council Tax – so these cuts have a huge impact,' Sir Albert said.

‘It is inevitable that next year we will have to make hard decisions about which optional services to stop providing altogether, and we may even find it difficult to maintain statutory services to the standard expected,' Sir Albert said.

‘The cuts from 2015 onwards will create a financial crisis in many councils across the country,' he added.