HOUSEHOLDERS across East Hampshire look likely to face big increases in their council tax bills next year.
After two years of modest 2.5 per cent rate rises in line with inflation, council tax payers could now face rises of between seven and nine per cent.
Much of the blame lies with a shortfall in government grant support and plummeting interest rates, which have cut income to councils.
Some councillors believe that parishes may also be paying the price of keeping their precepts too low for the past two years.
The ruling Tories at East Hampshire District Council had promised a balanced budget and tax rises keeping pace with inflation.
But last week shell-shocked district councillors heard their government grant had plummeted £122,000 lower than expected.
And Hampshire county councillors said their governement grant had done little to alleviate spending pressures. They warned that tax bills would have to rise to pay for vital services.
East Hampshire district councillors will probably be forced to sacrifice planned £144,000 contributions to the newly-set-up fund for community projects to keep tax bills down.
At a meeting of EHDC's cabinet last week, business and economic director Eric Norman also warned that the council's investment income was estimated to fall by £170,000 because of rapidly-reducing interest rates.
Finance portfolio holder Ferris Cowper told the meeting a zero donation to the community fund should not be misinterpreted.
There was around £300,000 still unspent which was available for community projects.
"Although next year we may not make a contribution, we can still issue grants for community initiatives and, based on applications so far, this money could comfortably take us through this year."
Leader of the Liberal Democrats Teresa Jamieson told The Herald: "The community is paying the price of the Conservatives sticking to old strict policies on the council tax.
"The government has reneged on its promises and is giving all of the Hampshire councils a minute rise in support grant.
"They expect councillors to increase their tax bills by six to eight per cent to compensate.
"We are hit locally twice as bills will go up and Conservatives have said the new community initiatives fund will be frozen."
Mrs Jamieson added: "Liberal Democrats supported this very new fund to help local projects and groups and we are concerned that it has become the easy target."
Figures at East Hampshire District Council are currently being re-examined in the light of the shortfall in government grant.
Final tax bills will not be known until early next year. And Alton Town Council will not be setting its precept until the meeing on January 24.
Hampshire County Council leader Ken Thornber said he was disappointed that the government grant did little to address the county's problems.
He said that to maintain Hampshire's current standard of services, council tax payers could be facing increases of between eight and nine per cent.