Harold residents are to be hit with an inflation-busting council tax bill as Havering Council slashes jobs in a bid to solve its budget crisis.

The council, which has to make good a £7.5million budget shortfall this year alone, has just announced a 6.36 per cent increase in its council tax, which will see the bill on an average band D property rise £63 to £853 after the Greater London Authority precept is added.

But the tax hike alone is not enough to bridge the gap between what the council needs to spend and what it has been given by the Government.

At least 200 council jobs are to go, and although it is hoped that some will go through natural wastage and by leaving vacancies unfilled, redundancies are inevitable.

Council officers are currently negotiating with trade union representatives about the proposals, which will save the council up to £3.75million.

Millions more is to be saved by "modernisation" in service provision, including:

hiving off some home care work to the private sector;

closing four old people's homes;

redesigning the Streetcare process;

tighter management of purchasing;

more flexible staff terms and conditions.

Defending the changes, leader of the council, Cllr Ray Harris, said: "What we have tried to do is break out of the vicious circle of simply cutting services to meet budget requirements and increasing council tax.

"We have tried to avoid making arbitrary cuts in services.

"Within the framework of this increase we are trying to improve the services we deliver and break out of that circle.

"There's no guarantee that these decisions are not going to impact on some people, but ultimately we hope the modes of service delivery brought in to replace the old ones will enhance the service."

But it's not all bad news.

The amount the council spends on the borough's schools is actually set to increase by £1.7 million on top of inflation, in line with government guidelines.

Cllr Harris said: "By passing more money on to schools, the council will be able to build on the successes already achieved in Havering schools."

Meanwhile, the council is having exploratory discussions on the possibility of transferring all of its assets - valued at £1.3 billion - to a joint venture company formed with a major property company.

Under the plan, the property company, which would maintain and run the buildings, would also purchase a 10 to 20 per cent stake in the company, bringing the council between £130million to £260million to be invested in the community.

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