A budget shortfall has left North Yorkshire residents facing council tax increases of more than twice the rate of inflation.

And county council chiefs today warned service cuts were unavoidable as they struggled to accommodate Government-set spending plans.

Council leader David Ashton said: "We will almost certainly have to cut back on services.

"We do not know yet what will be cut, but we have very serious funding problems in social services. We have already overspent by £1.5 million, particularly on placements in residential care and in children's services."

He said council tax bills were expected to rise by about seven per cent in an effort to keep cuts to a minimum, but it would not be enough to keep services as they are. Last week, the Government announced a grant increase of £11 million for the Conservative-controlled council.

But Coun Ashton said: "Inflation alone, including that related to teachers' pay, will push up council costs by about £13 million and the Government's own assessment is that North Yorkshire County Council spending should increase by almost £19 million."

He said the Government's decision to pay higher-than-inflation pay increases to teachers placed particular stress on the council's spending.

"We are rightly paying teachers more, but the Government is not funding it and that means we are having to cut back on school budgets to find the money," he said.

"We also have a lot more children to educate in county schools compared to last year. We have a very good educational record and more and more children are coming into the county from neighbouring authorities.

"There is something like 1,200 extra pupils next year, with about 80,000 already being educated."

Each pupil costs about £3,000 a year to accommodate.

Other factors putting pressure on the budget are:

lThe authority's commitment to reducing class sizes, meaning more teachers and support staff are needed

lAn ageing population will need more home and residential care

lThe county's 6,000 miles of road is the biggest network in the country, with a considerable backlog of repairs.

The expected rise compares with last year's, with North Yorkshire enjoying one of the lowest in the country at about 5.5 per cent.

A council spokesman explained that the Government system to calculate the budget had left the county at a disadvantage.

He said: "The Government works out a spending assessment followed by a redistribution exercise which is designed to reflect varying wage costs across the country.

"The net effect is always to move money to London and the South East. In real terms, North Yorkshire has lost out to the tune of £1.8 million."

The council will be holding special public meetings of its area committees next month to discuss the budget.

adam.nichols@ycp.co.uk