INVERCLYDE households are facing a council tax hike of nearly FIVE per cent to reduce cuts to services and jobs next year.

Council leader Stephen McCabe says the local authority is now facing a straight choice between increasing bills or making £2.5 million worth of more cuts.

His dire warning comes after the Scottish Government increased the cap on council tax increases from three per cent as part of their final budget settlement agreed on Thursday.

Elected members from all parties are about to draw up a list of proposed cuts and will look at whether to raise council tax to save £500,000.

Council leader Mr McCabe said: "That is the choice we are faced with.

"We can increase council tax by 4.79 per cent, which will raise around £500,000.

"But even then we will still have to find two million pounds worth of cuts.

"It is a very difficult situation.

"A council tax hike of nearly five per cent will be unpalatable to many.

"But in reality we are facing a very, very difficult situation.

"There are no longer any easy savings to be found, they are long gone.

"We need to find savings from vital services.

As part of the final settlement, agreed between the SNP administration with the support of the Scottish Greens, Inverclyde Council will get an additional £1.3 million in core funding.

The council had been looking at cuts of up to £4 million to plug a £7million pound funding gap, based on the original budget proposals from the Scottish Government.

Councillor McCabe added: "It is still short of what we need and a cut to local government grants.

"I am very disappointed with the settlement and the continued cuts to local councils.

"Our local MSP, finance secretary Derek Mackay, said that it was up to local authorities to decide whether to put council tax up.

"The Scottish Greens have sold themselves very cheaply."

The council's cross party budget working group will meet today to draw up a final list of proposed cuts and savings.

Many of the proposed cuts and increases that were avoided last year are now back on the table.

Cllr McCabe had indicated that his Labour-administration wanted to find ways to invest in initiatives to reduce poverty.

But he added: "This is without doubt the most challenging budget we have faced yet.

"This is very difficult as someone who lives in the area.

"I am not sitting in Edinburgh or London making these decisions.

"I am looking at cutting services and jobs for people I live beside, my neighbours and members of my own family.

"All the councillors pay council tax.

"It is very hard and after 11 years of cuts leaves you feeling very disillusioned - cuts to local governments are cuts to communities.

"There are going to be decisions raised that are not popular."