WINCHESTER civic chiefs are warning of "tough" financial decisions as they wrestle with next year's council tax.

The city council is beginning to draw up plans for managing the budget and setting a council tax figure to be finalised in spring 2007.

The Conservative group is setting is first budget after wresting control from the Liberal Democrats last May.

The Tories are promising that they will be able to keep the increase down to the level of inflation while maintaining services.

The Lib Dems paid a heavy electoral price for increasing the council tax by 4.9 per cent last year and also making some staff redundant.

George Beckett, Conservative leader of the council, said: "This is a very tough task. Just providing enough money for the new things the government says we have to do next year would mean a ten per cent rise in council tax if we didn't try to save money elsewhere.

"We're determined that we will ask tax payers for an increase only in line with the rate of inflation, but still have as many people cutting grass, emptying bins and dealing with your planning applications, in other words maintain the service to the public."

Cllr Beckett said that redundancies could not be ruled out, but that it was too early to be specific.

He said: "We will be looking at administrative posts rather than those that provide the services."

Therese Evans, the Lib Dem group leader, said last night: "I'm surprised the Tories are making these statements at this stage when they don't yet know what the government grants.

"The Lib Dems left them with a legacy of sound financial management and we expected to set a balanced budget in 2007-08. We will be keeping a careful eye on the budget decisions."

A report, to be publicly available later this week, will be discussed by the Cabinet on Wednesday, November 15.