CUMBRIA has been short-changed by the Government and faces a double blow from sharp council tax rises and cuts in services, according to council bosses.

Government spending plans unveiled by the Chancellor Gordon Brown suggest that Cumbria County Council will have to increase tax by around seven per cent next year and find £60 million in savings over the next three years.

CCC leader Rex Toft said: "The Prime Minister has made a public statement that he wished council tax rises to be around three per cent next year. Unfortunately the Chancellor does not seem to have been listening his announcement assumes that the amount of money raised by council tax would rise by 6.7 per cent."

Schools and social services for adults will bear the brunt of the "efficiency savings" as Mr Brown looks to shave £4.3 billion from the national schools budget between now and 2008. CCC says Mr Brown's Spending Review for 2004 will also leave the county facing a £6 million funding shortfall for adult social services.

Mr Toft also warned that council job losses could also be on the cards as Mr Brown wants to save more cash by shedding up to 20,000 local government jobs nationwide.

Concerns about council tax come as the Government announced an independent inquiry into how local government is funded.

Local Government minister Nick Raynsford said the review would look for a "fairer" way of raising money and would consider a range of options including a local income tax.

The current formula has seen councils across Britain criticised for soaring council tax bills as they try to raise more money for services.

Westmorland and Lonsdale MP Tim Collins, shadow education spokesman, said: "The key issue is how local councils are funded by central Government. Just replacing one council tax with another will not sort the underlying problem of soaring council tax bills which have been brought about by a conscious government effort to shift the burden for a whole range of services onto council tax payers."

Sir Michael Lyons will carry out the local government funding review and report back by the end of 2005.