A small number of councils that have already effectively gone bankrupt intend to increase their fees by 10% in order to keep services running. This comes ahead of the announcement of funding by local authorities later today. Michael Gove, the tariffs secretary, will reportedly announce that he is pouring 500 million pounds into the system to ease the crisis. Elliot Keck, head of campaigns at the Taxpayers' Alliance, told the Telegraph: "This is an unhappy new year for local taxpayers who are facing another round of devastating council tax increases. "Dozens of local authorities have already announced maximum increases, demonstrating that they are much more interested in burdening household budgets than in settling their own, and it seems almost certain that most others will follow suit. "Councils that have not yet announced tax rates for the coming year should seriously consider whether it is fair to ask families to fork out again." In previous cases, when councils filed S114 notices, they were allowed to raise council tax above the inflation rate. Last month, the Local Government Association said that one in five council leaders and CEOs, although they would probably have to file for bankruptcy in the public sector, and only half were confident that they had the means to fulfill their legal responsibilities in the 2024/25 financial year. Earlier this week Rishi Sunak is facing the threat of a new Tory rebellion after a group of more than 40 of his MPs demanded additional funding for councils in need of funds. In a letter to the Prime Minister and the Chancellor Conservative supporters warned Jeremy Hunt about the dangerous state of the finances of local authorities. They expressed fears that without emergency cash, many councils would be forced to cut frontline services and raise council tax in a general election year. A number of councils have recently issued Section 114 notices - essentially declaring bankruptcy - fearing that others may soon follow suit after rampant inflation. Last month, the government announced a preliminary £64 billion funding package for councils, which is due to be finalised in February by a vote in Parliament. But the deputies who signed the letter, including the ex-Minister of the Interior, the Lady Priti Patel and former Tory chairman Sir Jake Berry have threatened to vote against the local government agreement unless more cash is allocated. They wrote that they were "disappointed" by the lack of additional money for local councils from the treasury. "The last 12 months have been difficult financially for many of the communities we represent, given the unprecedented levels of inflation and demand for services," the deputies added in a letter organized by the Network of County Councils. "Therefore, we are extremely concerned that without any additional investment, the vast majority of top-level councils in our districts are planning to reduce services and increase municipal taxes so that they can adopt a balanced budget for the next fiscal year, as required by law. "There is still an opportunity to rectify the situation and ensure that MPs are able to support a vote on the local government agreement in the House of Commons in early February. "Therefore, we urge you to do everything possible to use the Final Financial Agreement of Local authorities to provide additional funding to local authorities to ensure that councils in our areas can continue to provide the services our residents depend on on a regular basis. "Moreover, given the pressure that is being placed on budgets, we believe that any additional funding that you can receive should be directed to services for children and transportation from home to school, since together they put unprecedented pressure on local government services."