COUNCIL taxes in Waverley could go up by 10 per cent or services could be cut to fund a council budget shortfall brought about by a meagre settlement from the government.
Secretary of State for Transport, Local Government and the Regions Stephen Byers announced late on Tuesday afternoon that he was increasing local council support by 7.4 per cent or at least in line with inflation, currently 2.3 per cent.
But the amount Waverley is set to receive is to fall by 0.83 per cent, or by about £45,000, when Waverley had expected to receive an inflation-adjusted increase of an extra £150,000.
The news created ripples of panic at Tuesday's Waverley executive meeting, which had already been discussing £500,000 of cuts in next year's budget.
Waverley's director of finance, Paul Wenham, who announced the news, told The Herald on Wednesday morning: "If the council were to follow the government implication and spend up to the government limit the Waverley council tax would go up by 10 per cent.
"The council will have to carefully consider the balance between making savings and increasing council tax."
Mr Wenham said Waverley would lobby the government, pleading its case before the level of government support - in Revenue Support Grant and in the Waverley share of the Business Rate - is approved at the end of January.
"We want to say it's not a fair settlement. We are a low-spending prudent authority."
Mr Wenham said Mr Byers's promise of more money for local authorities probably means more cash for education and social services, which are the responsibility of county councils, not boroughs.
Many Waverley councillors feel the borough is already penalised by the government because of its healthy and wealthy demographic profile and semi-rural environment.
It is one of 60 councils belonging to the Town and Country Finance Issues Group, which lobbies the government for fairer funding.
"We would say that authorities like Waverley don't get a fair settlement. It's a town and country area and the government settlement doesn't reflect this," said Mr Wenham.
"For instance in refuse collection, in towns, houses are close to each other, but in rural areas houses may be hundreds of yards apart and it costs more to collect their refuse."
Asked how optimistic he was about changing the government's mind, Mr Wenham said: "From experience, you don't tend to see a great many changes on the part of the minister, but that doesn't mean we won't make our case. We believe we've got a strong case."
The ruling Conservatives have kept council tax increases pegged back to 3.8 per cent in its first two years, seeking to honour their 1999 manifesto pledge to minimise them. And three years ago the increase was only 2.9 per cent.