WEST DORSET District Council has warned that challenges lie ahead after central government cuts its funding by £1.5million over the next two years.

The council’s executive committee discussed the authority’s finance settlement for the 2014/15 financial year at its latest meeting before its budget setting process begins next month.

Director of resources Jason Vaughan said that the grant the council had received from central government was largely along the lines of what had been predicted.

He said: “We have had a cut of £1.5million over the next two years but it is largely in line with what we thought it would be.

“The good news is our financial forecasting is robust and quite accurate but the bad news is we have lost £1.5million.”

The council received a total of around £5.2million in core funding from central government in the current financial year, with the reductions over the next two years seeing that figure reduce to around £3.7million.

Mr Vaughan said there were some positives to take from the settlement, including a repeat of a grant of £56,537 that the council received last year under a scheme to support rural councils.

However, council leader Robert Gould warned that the overall picture was as bad as the authority had expected.

He said: “It seems the cuts really are as serious as we expected them to be.

“I think it sets out the scale of the challenge that we have.”

Deputy leader Anthony Alford, above right, added that the council had coped well with reductions in funding already thrust upon it by central government but warned some tough decisions may have to be made to continue to face the challenge in the future.

He said: “It is a financial challenge that we have been successful in meeting so far but that challenge continues and clearly as a council we will have to take decisions which might not be the most appealing.”

Mr Vaughan said that all the council was now waiting for before the budget setting process could begin was word from central government as to the level by which council tax can be increased before local authorities must go to a referendum. The limit is currently two per cent.