Cannock Chase’s council leader has warned of stinging cuts to public services and rises in council tax as a result of the Government’s recession spending

Councillor Neil Stanley said the authority was facing a major financial challenge.

His gloomy came after the council was told by the Government it could see as much as £1 million cut from its funding following the massive national debt built-up because of the billions poured into the banking sector and the economy.

Now Councillor Stanley said councils across the UK have been told to expect a big drop in funding – as much as 10 to 15 per cent.

According to the Lib Dem leader it could see a cut of £1million for Cannock Chase Council meaning an inevitable slashing of services, potential job losses and rises in the council tax.

Already this year the council was forced to axe 29 jobs and cut a string of services to save £870,000 a year.

It has now emerged that last year Cannock Chase Council spent £120,000 more delivering its services than it had expected because of a reduction in income caused by the recession which has seen planning and building regulation applications fall.

This has cut the amount of money the council was hoping to have as a surplus to invest in services and put the council’s long-term financial strategy in doubt.

Councillor Stanley said: “We have been told to expect as much as a 10 to 15 per cent cut in funding from the Government which could mean as much as 20 per cent in real terms.”