HEREFORDSHIRE taxpayers are facing a hike in their council tax.

The council is working through the figures that have emerged from central Government following the most significant change in local authority funding in more than a decade.

"Our initial reaction was positive in view of the substantial increase in the Government's assessment of what the council needs to spend in order to maintain and deliver quality services," said Ian Hyson, the council's county treasurer.

"However, changes to the way these figures are calculated have resulted in an increase of some £25m - 10 per cent higher than expected - in this assessment of the council's spending needs."

Importantly, the revised method of working this out took into account the issues of a sparsely populated county with pockets of deprivation.

Overshadowed

But Mr Hyson said the potential good news was overshadowed by an increase in the level of council tax the Government assesses is reasonable for the council to charge.

"Because this figure has gone up, we will get a reduced amount of financial support, in relative terms, in the form of Government grant," he said.

"In lay man's terms, this means that while the Government says we should spend more on service, the increased cost would have to be covered by an increase in council tax."

"The bottom line is that the council will need to continue to make tough decisions in balancing the very real need to invest in services on the one hand, with the impact on council tax payers on the other," he added.

No indication of the level of council tax has yet been given and Herefordshire councillors will now have to meet to discuss the budget for 2003/04.