TAXPAYERS across south Essex could face the biggest council tax hike in a generation to plug an £22million black hole.

Council chiefs are warning bills may have to rise by up to £70 in two years’ time, largely because residents are enjoying a temporary freeze in their rates.

When the block on council tax increases ends in March 2013, the public may be expected to stump up the shortfall left by two years of no rises.

David Finch, Tory deputy leader of Essex County Council, said: “In 2013/14, the Government’s freeze grant will be removed, leaving a near £18million gap in the funding for the county council.

“To recover this gap in funding terms will require a council tax increase of more than 5 per cent.”

When the Government was drawing up its comprehensive spending review last year, it offered to give councils the equivalent of a 2.5 per cent council tax rise every year if they agreed to freeze rates for hard-pressed residents.

The original deal was designed to last until the end of the review’s impacts in 2014/15.

However, Whitehall has now pulled out of the agreement and only offered grants to cover a freeze in council taxes for 2012/13.

That means funding levels for councils will fall off a cliff in April 2013, when they no longer have the Government grant and are forced to deal with the impact of leaving tax levels untouched for two years.

The shortfall will hit hardest at the county council, which takes the largest slice of council tax.

However, Southend Council is facing its own budget hole of £3.5million, while Basildon taxpayers may have to raise an extra £400,000. In Castle Point, the funding gap will be £200,000 and in Rochford district it will be £160,000. For residents, that could mean a tax hike of up to £70 a year.

However, council chiefs at all authorities stressed no decision had yet been made on whether to accept the Government freeze grant for next year.

Even if they do accept it, Mr Finch said it was unlikely the entire resultant shortfall could be met through council tax increases the following year.

“Given that the Government has consistently indicated its willingness to use capping to constrain ‘excessive’ increases in council tax, an increase of five per cent is unlikely to be acceptable or realistic,” he said.