TEST Valley Borough Council Leader, Councillor Ian Carr, has this week raised concerns over the Government's mixed messages about council tax levels in 2004.

Mr Carr said: "The Government has warned local councils about high increases in council tax next year.

"But, based on the grant figures announced at the end of November, the Government itself has confirmed that council expenditure would need to rise by at least 7.7 per cent, just to keep current services going".

Figures released at the end of November show how much extra the Government has assessed each council will need to spend next year to continue to provide its services.

For Test Valley the total increase amounts to £427,000, but the Government will only provide an extra £125,000 in grant to support this expenditure in 2004 to 2005.

Changes in the way in which housing and council tax benefits are funded could also have an adverse impact on the budget, but the council is still waiting for more figures from the Department of Works and Pensions to see what the overall effect might be.

The council leader's comments were made as finance officers prepared to update the executive on the latest financial forecasts for Test Valley.

These show the possible levels of increase in 2004/2005, once new spending is taken into account.

The budget update, which includes the figures announced by the Government, will be presented to the executive on 10 December and includes large numbers of options for new spending and savings.

The executive will recommend its final budget on 21 January 2004, and this will then be put before the full council on 20 February next year.