Council chiefs in York found themselves facing the stark choice today of hiking council tax bills - or making deep cuts in services.

York taxpayers face an inflation-busting rise of between £30 and £67 on the average bill from next April. But the authority is pleased that its cash grant from the Government will be higher than projected, meaning tax rises and service cuts will not need to be as severe as last year.

City of York Council has been told its Standard Spending Assessment, which determines its grant for next year, will be 5.3 per cent higher than this year, nearly twice the rate of the inflation. In separate handouts, education in York is to get £3.5 million extra, and social services £150,000 more.

But North Yorkshire Police has warned of serious consequences to the way it protects the public after the Government funding announcement left it facing a £3 million cash shortfall from next April. Senior officers were today considering all possible savings, including reducing the number of bobbies on the beat.

City of York Council leader Rod Hills has welcomed today's Government announcement on his authority's spending.

Last month, he was predicting that the council faced an £8 million shortfall. But today, he said thanks to the Government's announcement and his officers' own belt-tightening efforts, the figure was now about £3.5 million.

He said: "Again this Government has delivered on its manifesto commitment to put education first. Last year, as a result of this, we were able to give our primary schools the biggest increase in funding of anywhere in the country.

"However, we still face hard decisions. We have an increase of well over two per cent above inflation, but we also face above-inflation increases in demand for services - for example the rising number of pupils in our schools."

North Yorkshire Police stresses it is too early to say if front line police officers will have to go. "My top priority will always be the protection of the people of North Yorkshire," said chief constable David Kenworthy. "I cannot rule out any option at the moment."

Opposition Liberal Democrat leader Coun Peter Vaughan said: "The risk of yet another double figure increase in council tax is just another disguised attack on ordinary people's earnings without putting up income tax. As for the tiny rise in social services funding, given that demand has risen significantly more than this it means a real chance of harm coming to those people who need our help."

Coun Vaughan, who is also chairman of North Yorkshire police authority's audit committee, added: "York and North Yorkshire have been short-changed again. It's very regrettable that this increase does not even meet the pay increase already agreed for police officers."

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