U-turn will see council tax in Telford & Wrekin frozen for two years

For the past two financial years the council has rejected a government grant offered in return for freezing council tax, and instead imposed rises of 2.5 per cent and, last year, 1.9 per cent.

But a change in government policy has led the ruling Labour administration to reconsider its plans for the next two financial years.

The plans will be presented to the council's cabinet next Thursday before the final budget and council tax rates are agreed by the full council early next year.

Councillor Bill McClements, cabinet member for finance and enterprise, said: "The government has moved the goalposts.

"With this change in treatment of the council tax freeze grant for the current year, we can expect future freeze grants to be built into long term budgets.

"This would allow us to change our approach on council tax."

The councillor added: "Accepting the grant and freezing council tax for the next two years would, however, add further savings pressures but we believe our approach to attract jobs and growth will help close this additional gap through the extra funding it will create for the council.

"We have faced very significant challenges in delivering more than £50 million ongoing revenue savings since 2009/10."

Councillor McClements said the council has lost more than 1,000 posts, cut by 50 per cent its senior management team and cutback office costs by more than 40 per cent.

The council had previously rejected a grant equal to a one per cent council tax increase as there was no guarantee of it continuing in future years, which could have left a deficit in the budget.

However, the government has now indicated that the council tax freeze grant would be ongoing, allowing it to be built into long-term budgets.

The budget for the next financial year will be subject to a period of public consultation before and further service cuts or savings are identified.

The council must find a further £23 million of savings by 2015/16 and a decision to freeze council tax over the next two years would add a further £700,000 to this, bringing the total to £23.7million

Consultation on the budget proposals will start in January, and will give residents chance to air their views on freezing council tax.