Residents across Powys may face a rise in council tax and a cut in frontline services following a “disappointing” budget settlement.

Powys County Council staff are being warned “business as usual” is not an option next year due to a lack of funding.

Gaps in funding could be met by a rise in council tax but an “extensive programme of savings and efficiencies” will also be required.

The council will get a 1.5 per cent cash increase in Welsh Assembly Government funding, well below the Welsh average of 2.9 per cent.

A Corporate Statement of Intent report, which has been prepared to outline the council’s future policy and financial direction over the next four years, states members must start planning for real term cuts in funding.

The report states: “Some of the funding for services may be met through council tax and additional Welsh Assembly Funding, if lobbying is successful.

“Bridging an annual gap of circa £5 million will be impossible without improving the productivity of our staff because staff costs account for £177 million of spend.

“It is also recognised that cutting staff and working harder is not a sustainable solution, the preferred solution is to systematically review what and how work is done.

“It would be foolish to say that redundancies can be completely avoided, but the aim will be to realise the benefits of changing working practices through natural wastage.

“To achieve this we will need to increase the capability of our staff, especially management and introduce more flexibility to job roles.”

It says there is “clearly a huge amount of instability” in the global economy and that it is now inevitable that the UK economy will enter recession.

“It is recognised that in order to deliver services effectively within the projected financial constraints ‘business as usual’ is not an option,” the report continues.

The report goes on to say that the schools modernisation programme will continue to be the main plank of the capital programme.

“The use of significant capital resources for this purpose will mean that other investment needs will not be able to be met in full,” it adds.

By Anwen Evans