Tory-controlled Worcestershire County Council has become the first shire authority to announce a prospective budget for 2007/08 - with a warning of services cuts of £18 m illion and up to 200 redundancies.
Council leaders yesterday put the blame squarely on the Government, which it said had given the county a below-inflation revenue support grant settlement while approving pay rises for local authority workers significantly above inflation.
The savings, to be found over the next three years, will enable Worcestershire to set a 4.9 per cent council tax increase in 2007. George Lord, the leader of the council, said the increase was above inflation but would have been even higher if the cabinet had not decided to pursue a "rationalisation" process.
Most of the cuts will involve getting rid of middle management posts in non-front line services and would be seen as "good news" by council tax payers who took the view that local authorities spent too much money on bureaucracy, Coun Lord said.
Describing the search for savings as a rationalisation process, Coun Lord said the final outcome would be to deliver streamlined and more efficient services.
He said: "We have had really serious growth budgets for the past few years and this is the first time we have had to look seriously at digging deeper."
The jobs to disappear represent about three per cent of the council's non-teaching staff and can be identified from natural wastage and voluntary redundancy, although Coun Lord is not ruling out compulsory redundancies. Preliminary negotiations with the unions are already under way and will be concluded by March next year.
Two of the county's residential education centres, at Llanrug in North Wales and the Malvern Hills, are likely either to be closed or handed over to a private operator.
Coun Lord said the council could no longer afford the £700,000 cost of subsidising the centres or meet the extensive capital cost of modernisation.
Worcestershire finds itself battling to cope with ungenerous grant increases as the Government channels more funding towards metropolitan city authorities, where problems of crime and social deprivation are perceived to be worse. At the same time, the cost of coping with a rapidly ageing population is placing additional strain on the social services budget.
Last year Worcestershire was handed a four-star excellence rating by the Audit Commission, the only shire county to receive such an award. At the same time, the Government said it expected the county council to find £3.5 million efficiency savings year on year.
Adrian Hardman, cabinet member for finance, has identified the first £8.2 million tranche of the £18 million cuts. Most of the money, some £4.1 million, will be found from environmental services and financial services. A further £1.6 million will come from adult and community services and £1.5 million from children's services.
Almost £4 million additional spending will be handed to social services.
Coun Hardman said Worcestershire had been let down by the Government and would now have to face "radical and robust" change.
Revenue Support Grant, the amount of money given to the council to help pay for services, will rise by 2.1 per cent. Wage rises for council staff, which are fixed by national negotiation have been set at 2.9 per cent.
Coun Hardman added: "There is a significant gap between what the Government is giving us and what we need to find to cover the pay deal. Given that about 80 per cent of our expenditure is on salaries, we are in a difficult position.
"And then, as every householder will know, inflation from the utilities is way above 2.1 per cent. Electricity has gone up by about 40 per cent and gas by 60 per cent. We have to find the money to meet these costs.
"However, we will be increasing our budget spend on areas of greatest need, such as care for the elderly and vulnerable young people. What is certain is that we will not be making cuts in essential front line services."
Worcestershire County Council council tax increases
* 1999/00 9.9 per cent
* 2000/01 8.9 per cent
* 2001/02 9.9 per cent
* 2002/03 8.2 per cent
* 2003/04 12.96 per cent
* 2004/05 5.1 per cent
* 2005/06 3.9 per cent
* 2006/07 4.9 per cent
