WORCESTERSHIRE is to benefit from a windfall after the Government decided to give almost £1 million to the county and city councils.

The handout will mean £886,000 for County Hall and £84,000 for the city council. The money can be used in any way either council wishes, and has been described as "a huge boost for local people".

It comes from a Government pot which rewards councils for helping create jobs in their area.

The scheme has been running for two years. An extra £500,000 was given to County Hall in 2006.

Councillor Adrian Hardman, the county's cabinet member for finance, said: "We anticipated we were going to get something this year, but it is more than we expected. We have already earmarked £555,000 of it for the general budget, but will keep some of it back until we decide how to spend it.

"The remaining £300,000 or so is going into our reserves while we consider what to do with it, and on what schemes to spend it."

The news is a big boost for the county council, which the Government awarded a below-inflation funding rise of two per cent this year.

The council was rated among the best performers in the country in February after the Audit Commission awarded it the top rating of four stars.

Coun Simon Geraghty, leader of the city council, said the Guildhall will keep its share of the money in reserves for the time being.

The city council was awarded a Government funding increase of four per cent this year and is under less pressure than County Hall.

Coun Geraghty said: "It's good news. I welcome any extra cash we get from the Government. It was announced in Parliament the day we set our budget for the year, and it's a shame we didn't get it earlier, but of course I still welcome it.

"We're going to keep it in reserves for the time being rather than invent a priority to spend it on at this stage."

Worcester MP Mike Foster said: "Funding of local councils has always been a hot topic in Worcester. Receiving an extra million pounds, to be spent on whatever the councils want, is a huge boost for them.

"I want it to be a huge boost for local people too."