Birmingham council tax payers face a huge increase in bills to provide emergency cash for struggling care services.

The Government is expected to announce on Thursday that it is allowing local authorities to increase a special charge added to council tax, leading to inflation-busting tax rises.

But city MP Jess Phillips (Lab Yardley) attacked the plan, saying it would lead to “an even worse postcode lottery” because Birmingham receives less funding than other parts of the country for care.

Authorities are currently allowed to impose a social care “precept” increasing council tax bills by two per cent, in order to fund care services. It comes on top of the basic increase in council tax bills, which is capped at 1.99 per cent, and puts the maximum increase allowed at 3.99 per cent.

Ministers are now reported to be planning to increase the cap on the social care precept, or to abolish it altogether.

It could lead to council tax bills increasing by seven per cent just to pay for social care next year - on top of the standard increase.

The Department for Communities and Local Government has refused to comment on the reports until the official announcement is made by Local Government Secretary Sajid Javid, MP for Bromsgrove.

But the Local Government Association, (LGA) which represents councils, confirmed Ministers had talked to them about the proposal.

LGA spokesperson Izzi Seccombe, Conservative leader of Warwickshire County Council, told BBC Radio 4’s Today programme: “We’ve had some dialogue with ministers about this and the concern for us is the ability for this to actually fill the gap that we have for long now said that there is in social care.”

Councils which take advantage of the power to raise council tax may come under fire from angry taxpayers.

However, they are also struggling to cope with huge cuts in grant from central government.

Birmingham City Council has cut overall spending by approximately £590 million since 2010, announced plans to save another £27.8 million and has launched a consultation on new savings of £50.6 million for 2017/18.

Councillors in the city may feel they have little choice but to raise money from council tax for care services if the option is available.

Birmingham MP Jess Phillips said she said she would be willing to back an increase in the national income tax rate rather than increases in council tax.

She told the BBC: “People have got to recognise that this is going to cost, and if it’s going to cost people need to pay for it.”

And she pointed out that Buckinghamshire care homes receive £615 a week per resident while those in Birmingham receive a significantly lower sum of £436 a week.

In theory, councils already have the power to impose higher tax increases, but only if they hold a public referendum asking local people to approve the new tax rate, which effectively makes it impossible. By increasing or scrapping the cap on the social care precept, Ministers will allow them significantly to increase council tax without needing a referendum.

Social care experts said that the system was reaching crisis point.

Martin Green, chief executive of Care England, which represents care home providers, told The Times: “The whole thing could topple over at any moment and those who are poor and vulnerable will suffer most.”