RESIDENTS across the county could lose services and see community facilities crumble if politicians pursue plans to cap council tax, town leaders have warned.

The Government is considering telling certain town and parish councils the must hold referendums from next year if they want to hike precepts by more than two per cent or £5.

Authorities are concerned that the costly polls mean that residents would vote down the rise, which could lead to budgets being drained.

Christine Lalley, county officer for Oxfordshire Association of Local Councils, said: "This has been hanging over our heads for years and it’s come back with a vengeance.

"It's utter nonsense. Two per cent more of a tiny figure is still a tiny figure. It's pathetic. It's a sledgehammer to crack a very tiny nut.

"With town and parish councillors we can just talk to them at the pub or in the shop if we are not happy.

"A referendum is a poor use of money that would be better put into actual services."

Proposals are under consultation and would apply to councils with a band D precept exceeding £75.46 this year, and a total precept income of at least £500,000.

In Oxfordshire this affects Witney, Banbury, Bicester, Carterton, Didcot, Thame, Abingdon and Kidlington councils.

Referendum rules are already in place for larger authorities including Oxfordshire County Council and district councils.

Didcot Town Council leader Bill Service said the plan was a government 'gimmick' and could lead to facilities deteriorating or even being shut.

He said: "We wouldn't have been able to refurbish the Civic Hall if we have been limited. It's our only way of raising funds to improve public facilities.

"It may come to a stage if we don't think the council can afford it that facilities will have to close. It would be awful."

Abingdon Town Council leader Mike Badcock said that the multi-million pound regeneration of Guildhall could have to be pared back if the cap came into force.

He said the council was in 'a period of uncertainty' until the Chancellor announces in the Autumn Statement if the plan is going ahead.

Mayor of Carterton Lynn Little described the plan as 'outrageous', adding: "Everybody is struggling – when funding was withdrawn from county level it had a knock-on effect. There is all this pressure coming down on us for our children’s centre and to do that we have to put up the precept."

Mayor of Thame Linda Emery added: "The children's centre and senior citizens' centre both had massive cuts and we are talking about somehow adding them into our budget. This proposal is very much on our minds."

A spokesperson for the Department for Communities and Local Government said: "The government is committed to keeping council tax low and maintaining the right of local electorates to approve or veto excessive council tax rises."