Cuts could be on the cards next year after the Government revealed the council's spending power will be slashed by more than the national average next year.

Sutton's grant from the Government for 2013 will be £169.803m, 2.2 per cent down on last year although there will be an incentive for the authority to keep council tax frozen again.

Under plans laid out by Secretary of State for Communities and Local Government Eric Pickles yesterday, councils across the country face an average of a 1.7 per cent reduction in their grants from central Government.

But councils will also, for the first time, be able to keep up to half the business rates raised in their areas in what the MP called a fair deal.

Council's are given an annual grant from the Government each April to supplement the money they raise through council tax and other methods. In recent years councils have faced reductions in this amount but have been given incentives to make sure council tax is not increased to make up the difference.

Think-tank the Local Government information Unit (LGiU) has hit out at the latest cut. LGiU director Dr Jonathan Carr West said: "Councils may feel like they're victims of their own success. Local Government is by far the most efficient part of the public sector and has driven down cost year on year and absorbed massive spending cuts over the last two years while largely protecting front line services.

"Local government is full of inventive, committed people, both elected members and council workers. No doubt they will return to their desks in January determined to use the coming year to plan further efficiencies, but as they look to the future they may be forgiven for feeling a little less festive sparkle."