THE leader of Inverclyde Council says a Scottish Government budget bombshell has blown an extra £1.5m hole in the cash-strapped authority's finances and could trigger a tax rise locally.

Provisional details released by the Scottish Government just before Christmas revealed that councils across Scotland will receive a £14 billion funding settlement.

Number-crunchers at the Municipal Buildings have been poring over the details since.

Councillor McCabe says finance chiefs here had budgeted for a real terms 'cash cut' of £0.5m for Inverclyde, but were shocked to find that the actual reduction will be nearer £2m. 

Mr McCabe says the figure is 'significantly worse than anticipated' and warned it will force the council to 'bridge the funding gap' in other ways.

The Labour councillor said: "When preparing our budget, assumptions are made about how much we will get from the Scottish Government in terms of 'flat cash' funding. 

"This doesn't take into account pay awards and inflation. 

"We have a falling population so we don't just budget for 'flat cash', we budget for a cut. 

"The finance team looked at the funding the Scottish Government is proposing to give us next year and compare that with this year, and the reduction is significantly more than we had been anticipating."

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Mr McCabe says the only options for making up the loss in funding are introducing more cuts to services, which could mean more job losses, or snubbing the Scottish Government's council controversial tax freeze policy.

The senior councillor says choosing to not freeze council tax would protect key services. 

Mr McCabe added: "On the basis of the figures we have been presented with, I simply cannot recommend to the council that we freeze council tax. 

"If we're forced to make more savings, there is the potential for job losses. 

"As there's no provision for pay rises in the funding, we could have staff going out on strike again because we can't afford to make a decent pay offer.

"The Scottish Government says it's prepared to give councils a share of £144 million to cover a council tax freeze but that will work out at only £63 million when other things are taken into account. 

"I know that a number of councils are actively considering rejecting the offer of the council tax freeze grant. 

"We will have to make an assessment in the new year in terms of what our position will be.

"It's a very real decision for councils to make."

Mr McCabe is calling on Inverclyde residents to share their views on the council's own budget in an online consultation.

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