Plans to increase council tax in Reigate and Banstead by two per cent were approved by the council's executive last night to prevent a budget black hole.
It passed the proposal despite a Government minister blasting the rise as ‘flagrant democracy dodging’.
The council is turning down an offer of a Government grant - the equivalent to a one per cent increase in funding - for councils that freeze council tax.
It forecast that going down that route would lead to a funding shortfall of £400,000 in 2015/16 and the need for £1.4 million in savings over five years.
Local Government Minister Brandon Lewis has said it is doing residents a disservice by raising council tax a ‘hair’s breadth’ below the trigger level for a referendum which is any figure above two per cent.
But deputy council leader Victor Broad has refuted the criticism and said the ‘very, very little increase’ was being democratically decided in the face financial pressures.
Last month Coun Broad said: "We are a very well run council and we will not be doing our residents any favours if we have to cut services."
The proposal will go before full council for approval on February 14.