COLCHESTER Council is set to increase its share of council tax by about £5 a year for an average home.

Bosses say the 2.75 per cent rise will bring in an extra £307,000 at a time when the authority's central Government grant is being slashed by about 70 per cent.

The amount of money being handed to the council in return for giving new developments the green light is also being cut by almost one-third, to just over £3 million.

Together, the cuts will amount to a loss to the council of more than £2 million.

However critics have previously warned New Homes Bonus money, also paid by central Government, should not be used to prop up the authority's budget.

Paul Smith, Colchester Council leader, said: “There is no doubt the council is facing some very difficult and serious financial pressures, as a result of the government reducing our funding.

“In fact, the cuts we face go well beyond the next financial year, which is why we are having to look at every option available to save money, generate income and continue to deliver on our promise to protect vital services, increase investment and create more growth in the borough.

“Unfortunately this means that, for only the second time in eight years, in order to absorb even deeper government cuts and close the budget gap, we have had to increase our part of the council tax by 2.75 per cent.”

The 2018/19 budget will be discussed at a cabinet meeting next Wednesday, January 31.

Despite the squeeze, some £750,000 is expected to be allocated to the Northern Gateways sports project while £250,000 will be moved in the authority's revolving investment fund.