SURREY residents could face a four per cent increase in council tax as well as cuts to services to plug the hole of more than £35 million in the county council’s 2016 budget, created by a reduced government grant and the cost of implementing the new Care Act.

Announcing provisional local authority grant settlements last week, Greg Clark, Secretary of State for Communities and Local Government, said town halls could introduce a dedicated precept of up to two per cent to spend exclusively on adult social care.

The new two per cent social care precept, the equivalent to £24 per year on an average Band D home, is to provide dedicated caring for the growing elderly population. A further £1.5 billion will be available to councils to work with the NHS to ensure that care is available for older people following hospital treatment through the Better Care Fund.

The government will maintain the two per cent council tax threshold in order to keep bills down for hardworking people with the addition of a separate two per cent dedicated precept where councils, such as Surrey, have adult social care responsibilities.

The Local Government Association calculated settlement core funding will fall by 6.1 per cent, or £2.6 billion in 2016-17.

A Surrey County Council spokesman said: “This is a complex set of documents and we won’t know the full implications for Surrey until the settlement is finalised by the government early next year but it is clear that it will make setting our budget in February a very tough task.”

Responding to the possible council tax hike, Surrey Residents Association and Independent Group leader councillor Nick Harrison said: “Residents of Surrey will not support this decision. People will be facing a four per cent increase in their council tax bills while their salaries are stagnant.”

Waverley has calculated it faces a swingeing 52 per cent cut in its revenue support grant, equivalent to £800,000. Council leader Robert Knowles said: “I am horrified that the government is cutting 52 per cent from Waverley Borough Council’s grant.

“Over the past few years Waverley has faced significant financial pressures and has responded to them effectively by delivering savings exceeding £9 million per annum and keeping council tax frozen over the past six years.

“This is much more of a severe cut than was initially anticipated and means that Waverley may have to cut services and increase council tax just to balance the books.

“The government is determined to strip Waverley of its financial resources. This year a 52 per cent reduction – next year virtually no grant at all.

“Also, the promise made by government that Waverley will be able to keep more of the business rates they collect also seems to be a false promise as this announcement suggests no extra money is coming to Waverley.

“On the one hand the government is extending the New Home Bonus with the guise it is for the delivery of new homes, when really it is a just a sweetener to local authorities but no substitute. Using the New Homes Bonus to replace the grant is basically dishonest, unsustainable and forcing even more pressure on Waverley and the South East.

“The government is trying to bankrupt Waverley. The cut in grant should also be viewed alongside the financial impact that the new Housing and Planning Bill will have on Waverley. The government is forcing Waverley to decrease rents on council homes by one per cent every year for the next four years and will force Waverley to sell off its most valuable houses.

“This will take a further £300 million out of our housing budget over the next 30 years and severely impact on our ability to provide homes for people and maintain decent standards.”