Council finances in a black hole shows system terminal

10.00.00am UTC (GMT +0000) Wed 9th Nov 2005

Councils across the country are faced with a terrible choice - raise Council Tax or cut crucial services

Responding to the Local Government Annual report indicating a £2.2bn shortfall in Council finances due to spending pressures imposed by the government, Sarah Teather MP, said "This proves that postponing the review of Local Government Finance till 2006 was ridiculous."

Sarah Teather went on to say "Councils across the country will now be faced with a terrible choice; raise council tax and face being capped or cut crucial services."

"This farcical situation will continue as this centralising government dithers about how best to reform Local Government funding. As long as Labour denies councils the freedom to raise and spend there own money, we will go through this problem every year."