Toughest time ever for Cannock Chase Council says leader as he campaigns with Shadow Chancellor John McDonnell

Labour Councillor George Adamson was speaking as he outlined the council's multi-million pound deficit and the need to raise council tax by nearly two per cent.

Between now and 2020, the council forecasts it will lose more than £2 million from the Government's downgrading of the revenue support grant – plus another £1.9m in other Whitehall funding.

This is on top of the £1m a year it is set to lose in business rates in the immediate future after the closure of Rugeley Power Station, the region's biggest ratepayer.

Councillor Adamson also revealed that a national reduction in social housing rents will mean the council will lose £75.8m over the next 30 years, damaging the prospect future building programmes.

Yesterday Councillor Adamson was out door knocking in Hednesford with Labour's Shadow Chancellor John McDonnell MP.

Mr McDonnell was heavily critical of the Conservative government led by David Cameron in allowing council's such as Cannock to be left in a poor financial situation.

He said: "The main problem we're facing is that we have a Conservative government that doesn't care for areas like this."

Under the budget, the council's deficit will rise to £2.3m in 2018/19.

This will be offset by working balances to deliver a balanced budget, but Councillor Adamson said 'it cannot be avoided that we face really challenging times in the next few years'.

Despite freezing council tax for the past two years, it will rise this year from April 1 by 1.95 per cent. This is an increase of 6p per week for the average Band D council property. Councillor Adamson said the authority had no option given its financial situation, adding that Cannock would not be alone in their decision to opt for the increase.

Speaking at a full council meeting earlier this week, he said: "The overall shape of the council's 2016/17 to 2018/19 financial plan has changed dramatically since cabinet made its recommendations. The announcement on February 8 (the closure of Rugeley Power Station) has come as a complete shock. This is clearly a very difficult time for the workforce. It also has major financial consequences for this council and all its residents.

"The power station currently pays approximately £4m in business rates.

"The direct impact on Cannock Chase Council will be a direct loss of funding of just over £1m. Our existing deficit will now increase by £1m.

"The council, therefore, faces a difficult transition period over the next few years and our first priority is to lobby our MP and Government to see if additional funding can be provided in 2017/18 and 2018/19 to enable us to cope with this shortfall.

"Many other local authorities have enjoyed transitional funding allocations but, unfortunately, Cannock Chase Council has not to date. Our overall financial situation could deteriorate further since details of the Government's funding for the administration of the local council tax reduction scheme is still awaited, some three months later than last year's settlement.

"We face the most difficult and challenging period ever for the finances of this council."

Despite Councillor Adamson's comments and the financial situation, this is the fifth year in a row when budget proposals passed include no plans for compulsory redundancies.

He insisted that 'this administration is doing all in its power to ease the financial pressures on businesses and families'.

It will also protect council frontline services as a 'priority' according to a report accompanying the budget proposal. Councillors are hoping the proposed Mill Green Designer Outlet Village, which will have 132 high-end shops and restaurants, will compensate some of the business rates lost by the closure of Rugeley Power Station. The budget was passed on Tuesday afternoon with 25 votes for and seven abstentions.

The Conservative party opted to abstain, insisting they were happy with the budget for the next financial year but could not agree on plans for the following financial years.

Despite this, they did not offer up an alternative budget.

During the meeting their leader, Councillor Paul Snape, said that they had planned to offer up an alternative that involved freezing council tax again and taking money from the general reserves where they believe there is a surplus.

But Councillor Snape added that these plans were abandoned when the news about Rugeley Power Station dropped and accepted there was no choice but to raise council tax.