WARD committees which have seen their budgets slashed as part of a drive to cut back on York council spending have been given hope by the authority's leader.

Coun Steve Galloway said the authority hoped it could restore some ward committee-funded improvements if it was able to avoid the costs of council tax capping, and performed better than its original budget expectations.

Coun Galloway said City of York Council did not yet have "a consolidated end of year" figure for its expenditure.

But he said he was "cautiously optimistic" that if the council performed better than its budget it could look at restoring some ward committee funded improvements.

The decision to cut the budgets provoked a furious reaction from opposition councillors and welfare groups when it was first revealed in January. Labour group leader Dave Merrett branded them "high-handed" and "bad democracy for York".

Coun Galloway then said the measures, which formed part of £6 million of efficiency savings designed to present a balanced budget, had been forced on the council because of the inadequacy of central grants.

He said discretionary services, such as those provided by ward committee cash, were the ones which came under pressure in times of belt-tightening.

Now the Government has put the council at risk of having its budget capped, which could mean York has to pay £170,000 to rebill residents for council tax. The authority has met with Local Government Minister Phil Woolas in a bid to thrash out a solution.

The Press also sent an open letter to Prime Minister Tony Blair urging him to drop the capping threat.

Coun Galloway said: "I am cautiously optimistic that that we will, once again, out-turn at better than budget and, as a result (and providing we avoid the cost implications that council tax capping would involve) we would be able to look at restoring some of the ward committee funded improvements that residents have voted on as being a priority for their areas.

"I would expect to make an announcement on this shortly after we learn the results of the capping decision (which may be later in June)."