Sutton residents have been warned to expect a rise in council tax or service cuts after the Government announced it would only increase local council funding by one per cent next year.

The Government's comprehensive spending review (CSR) was announced earlier this month and most local authorities will receive a one per cent increase. Sutton - which is a floor authority' so does not qualify for extra help - is likely to get less than that.

Councillor Sean Brennan, leader of the Liberal Democrat-controlled authority, said: "We want to continue to put the needs of our community first by proving high quality and affordable services for local people, but to do this we need the resources.

"Instead we are faced yet again with a wholly inadequate level of funding and our residents deserve more.

"In particular, resources are insufficient to meet growing needs in services for the most vulnerable people in the borough, such as the elderly, people with physical disabilities, mental health needs, and people with learning disabilities."

A spokeswoman said it was too early to say whether there would be a rise in taxes or service cuts, but added: "It puts more pressure on services and pressure on us to increase council tax."

Sutton will find out in December what its final grant allocation will be.

Conservative spokesman for finance, Councillor Terry Faulds, said: "Every year we get the same old hand-wringing whinging about the poor settlement from the Government. But the council needs to look more closely at how they deliver services cost-effectively.

"It could make a start by looking at the amount of money being spent on temporary staff, long-term so-called interim managers and consultants', many of whom are in effect full-time employees.

"Currently the LibDems have a culture of complacency by hiding behind their four star Audit Commission rating. But try telling that to families paying £1,300 council tax a month."