The council is set to slash more than £17m from its yearly budget, axing 16 jobs and millions of pounds of spending on health and social care.

Elderly care, retirement housing schemes and nursing placements have been identified as key areas for costcutting amid a "draconian" squeeze on council funding by central Government.

Croydon Council also plans to cut formal ties with twin town Arnhem, in the Netherlands, with which it has been linked since 1946, to save just £10,000.

The cuts were outlined in a report published yesterday on preparations for the authority's 2014-15 budget.

Although the biggest single saving comes from a renegotiated IT contract, which will free up £3.1m, about a third of the cuts will come from the adult social care, health and housing budget, which will be cut by £5.9m.

Those include saving £600,000 by opening up to two retirement blocks, in Thornton Heath and Upper Norwood, to homeless families, and reducing spending on care packages by £250,000.

Coun Tony Newman, Labour group leader, said adults and children's services would unfairly bear the brunt of the cuts.

He said: "Many, many millions are be being targeted from the most vulnerable people. When you take these budget proposals and consider the now-completed new council offices, one of the outcomes of that has been this huge pressure on the council's budget."

Four finance jobs at the council are set to be cut, while two data analysts and a health and safety employee are also among the 16 posts likely to be axed.

Some are presently unfilled but at least eight current employees face redundancy.

The £10,000 annual budget for grants to maintain community relations between Croydon and Arnhem is also set to go.

Local historian Sean Creighton said: "I am astonished that this cut is being considered given the long link between the two towns because of their experience of bombing in the Second World War."

Coun Timothy Godfrey, Labour spokesman on culture, said the council was "cutting off its nose to spite its face" over the "much-loved" link with Arnhem.

Your Local Guardian: The new John Frost Bridge over the Rhine in Arnhem, scene of heroic fighting in September, 1944

Dutch town Arnhem, which has been linked to Croydon since 1946

Coun Newman called for the council to take a stronger stance against the coalition Government's "draconian" cuts to local authority budgets.

The council report, written by director of finance Richard Simpson, warned Croydon faced "hugely significant" financial challenges over the next four years in the face of continued cuts to Government grants.

Croydon Council's will fall by 13.3 per cent next year and is expected to be cut by a further £51m by 2018.

The council declined to comment on the budget, which will go before the scrutiny and strategic overview committee on Tuesday night.

The budget is provisional as the level of Government funding the council will receive has not yet been precisely decided.