YORK and North Yorkshire councils have warned that harsh choices lie ahead after a government announcement that wiped millions off their budgets.

The Communities Minister Kris Hopkins today told the House of Commons that local governments across the country faced a 1.8 per cent cut in spending power in the coming year.

In York, finance staff are expecting that cut to translate into £8 million being slashed from the city’s budget, leaving the council to find £13 million in savings in 2015 to 16.

The council leader Dafydd Williams said that even though early indications showed the cut to be roughly what they had anticipated, that did not make the choices on which services to keep and which to cut any easier.

He added: “Like many councils, the largest pressures on our budgets is in the delivery of Adult Social Care, where increasing complexity of cases and an ageing population are leading to increased costs.

“Between 2007 and 2015, £16 million of extra funding has been allocated to meet this demand.”

The latest news leaves the authority with central government funding that is £90 million a year less than in 2007 ­— a difference of more than half the current £128 million budget, he added.

But some good news had come with the minister’s pledge to continue the central government help to freeze council tax.

Councillor Williams also spoke out on the need for more tax to stay in local areas.

He said: “Local government cuts should fall where the local council and communities feel they can best manage these.

“The minister is correct in saying that we expect modest growth in business rates collection.

“But we must be allowed to keep a greater share of these.”

Neighbouring North Yorkshire County Council faces a £21 million reduction in funds, meaning the council has four years to save another £73 million after making £94 million in savings in the last four years.

County Councillor Carl Les, the deputy leader, said: “The announcement by the government is just as difficult as we had anticipated.

“It confirms the accuracy of our planning and emphasises the extremely difficult and challenging predicament in which we find ourselves.”

The announcement means a cut in the council’s spending power of more than a third in eight years, North Yorkshire added.

The county councillors will meet in February to approve a budget for 2015 to 16, including a council tax rise of two per cent.

If the council does not increase council tax, it will have to find a further £2.3 million in savings in addition to those already planned, a spokesman said.