Telford & Wrekin Council is pressing ahead with its lowest hike in council tax for more than a decade – to help residents cope with the credit crunch.

Members of the council’s cabinet yesterday agreed a rise of 2.5 per cent from April, about 40p a week extra for the average taxpayer.

But it will also mean about £4 million in savings, including as yet unidentified redundancies among council managers.

The ruling Tory group’s budget strategy – hailed as a response to the pressure on household budgets during the slump – will now go for approval by the full council on March 5.

Despite the recession, the council remains committed to its three-year investment plan, including the £23 million Borough Towns Initiative, pushing ahead with a revitalised Telford Town Centre and a £200 million programme to redevelop schools.

Millions of pounds will also be spent on supporting private sector and social housing, protecting services for young and old people and improving roads and paths.

And the concessionary travel scheme for people aged over 60 will be extended, giving free public transport from 9am.

Councillor Adrian Lawrence, cabinet member for resources, said: “The financial climate has changed very quickly and we are in a time of great turmoil.

“We have had to change and adapt as we have gone on. But we are taking the lead as a council to continue driving investment while at the same time keeping costs down.”

Councillor Eric Carter, cabinet member for regeneration, said: “I believe we must continue with our regeneration.”

The Conservatives’ strategy won general support from both Labour and Liberal Democrat opposition.

Councillor Bill Tomlinson, a Liberal Democrat, praised Councillor Carter’s “tenacity and enthusiasm” but sounded a note of caution over the use of £950,000 in balances and potential financial problems in future.

Councillor Keith Austin, Labour group leader, called for more emphasis on helping homeless people and to use money from the planned sale of the civic offices to boost services and regeneration.

• Council tax in Telford currently averages £1,051 a year, the lowest in the West Midlands and £120 less than the rest of Shropshire.

By Peter Johnson