Putney residents warned the Council tax will probably have to rise.

Local authorities in London and the south east could be forced to put up council taxes and cut back spending on services after ministers awarded above inflation funding increases to many northern boroughs.

Wandsworth is one of the worst hit by the new system for sharing out cash to councils. Its 3.5 percent increase in Government grant is the lowest possible under the revised formula announced last Thursday. The national average is 5.9 percent with many northern councils gaining increases of up to 12.5 percent.

Wandsworth could lose even more cash after ministers withdrew a number of specific education grants. This will limit the overall increase in Government support to around 3 percent. With councils' wage bills going up by around 5 percent next year this leaves Wandsworth with a shortfall of 2 percent in the amount of money it gets from the Government.

Deputy council leader Maurice Heaster said ministers were misleading the public with claims that increases were above inflation:

"Most council spending goes on labour costs which are set nationally. Wage rises in the coming year for groups like teachers and other council staff together with increases in employers' insurance are likely to push costs here up by around 5 percent.

"There may be above inflation increases for many northern councils but these are being paid for by people in areas like Wandsworth. The only way the worst hit councils will be able to make up the difference will be through pushing up council taxes and reducing spending on services."

December 10 2002