Taxpayers could be facing the highest possible council tax hikes allowed without the authority having to take the decision to a referendum.

Papers published by Sutton Council ahead of a meeting next week recommended the authority approves a 1.99 per cent rise in the amount of money it demands of its residents.

If it rises 0.01 per cent higher, the council would have to formally ask permission through a referendum.

The move has been lambasted by leader of the opposition Councillor Tim Crowley, who called on the council to dig in to its £22m worth of reserves to ease the burden on residents.

If approved at the strategy and resources committee meeting on Monday, the rise would bring in a further £1.6m in funding a year, against a backdrop of a 19 per cent cut, worth £8m, in funding from the Government.

Coun Crowley said: “We find the proposed increase in council tax of 1.99 per cent a disgraceful act when the council has at its disposal £22m of cash reserves that is, in effect, taxpayers’ money.

“This is way above the current level of inflation but, strangely enough, just 0.01 per cent under the level that would trigger a referendum on the issue.

“We urge the administration to rethink this increase that will burden the already hard hit taxpayers of the borough.”

Councillor Simon Wales, lead member for resources hit back pointing out using reserves would only plug a gap short-term and not tackle long-term shortfall.

He said: “It is not prudent to use reserves as they are one-off in nature, when they are gone they cannot be restored and the problem of funding ongoing expenditure will still remain.

“It only pushes the problem back to future years.

“Keeping a prudent level of reserves plays an important part of enabling the council to respond to financial risks.

“For example, reserves fund important capital expenditure such as the majority of the funding for Cheam leisure centre roof works and improvements.”

Should the increase be passed by the committee, it would go before full council to be officially adopted for the 2015-16 financial year.

The increase would be the first time in six years council tax has risen.

According to the council, the tax rise would mean a Band D property would be charged £1,163.60, an increase of £22.71.

Previously, the council had budgeted to freeze tax until 2018-19.

This raise would reduce the £40m of cuts Sutton Council will have to introduce by that year by £6.6m.

According to council officers writing the report: “Overall financial position faced by the council means that every option to reduce the funding gap needs to be carefully considered.

“A council tax increase shares the burden of addressing the funding gap across all council taxpayers whereas service reductions affect only users of the service.”

The council also points to additional future expenditure on costs of safeguarding children as reasons for increasing revenue through a rise in council tax.