COUNCILLORS have warned of difficult decisions ahead as they face a potential £40,000 budget cut.
Morpeth Town Council has set up a working group to draw up plans for next year’s budget and council tax precept.
But its Finance and General Purposes Committee has heard that thousands of pounds may be lost from the start due to changes in council tax benefit.
The new system came into force in April when the Government passed on responsibility for administration to principal councils, funded by grants.
However, they only covered 90 per cent of the costs and a knock-on effect was a reduction in the council tax base for town and parish authorities.
This year the county council passed on the grant funds proportionately to the smaller authorities to cover the shortfall, amounting to more than £41,000 in Morpeth, but at the time officers warned that it was a one-off.
Now lobbying is under way both locally and nationally to try to secure the cash again, but no decisions have been announced.
Finance Committee Chairman David Parker said: “Because we know that there is no certainty that that money will be coming again, we are already £41,000 down at this stage.
“In order to stand still next year, unless we get that money, we may have to put the precept up by nine per cent, with no possibility of adding to the budget. The other way is to reduce expenditure. We are faced potentially with making cuts or increasing the council tax precept.
“We need to help the public to see what the options are. They need to know what the situation is.”
He added: “We have to review everything really. We may have to consider doing things in a different way in the next few years. A lot of things are potentially on the table.”
Coun Andrew Tebbutt said that by just covering inflation two per cent would be added to the precept, representing about £3 a year for the average household.
He added: “I suspect we won’t know until December whether that £40,000 will be coming our way or not. My view is that at this stage we presume it is not in the budget.”
Coun Nic Best said: “There is an opportunity to undertake a fairly radical review of the way we are operating in terms of expenditure.”
And Coun Adrian Slassor said: “There is not a lot of time, but there is a lot of work to do. We are probably going to have to have a plan A, B and C.”
The committee is expected to present firm proposals by mid January, but initial discussions will be carried out behind closed doors.