A SERIOUS cash shortfall could force South Lakeland District Council to raise council tax bills, close public toilets, sell off land and delay kerbside recycling.

Senior council chiefs and members have been working behind the scenes to draw up a package of tough measures to plug the £587,000 shortfall predicted for 2001-02 - work described as "harrowing" by long-standing councillor Elizabeth Braithwaite.

Director of finance Jack Jones told the Gazette that the warning bells rang almost a year ago when the council realised it faced a £400,000 shortfall for the foreseeable future.

Coupled with that, the predicted rise in car park income failed to materialise - perhaps due to poor weather, the strong pound or the price of fuel - leaving the council around £230,000 down.

Contracts due to expire - such as park and garden upkeep, and toilet cleaning - are expected to cost more when they go out to tender.

The council - which recently agreed to spend up to £ 50,000 recruiting two new directors - has also been spending some of its investments, so interest has dropped.

Not only must the council bridge the shortfall, it must also find £203,000 to match Lottery grants, introduce half-price bus fares for elderly and disabled people this year - as required by the Government - and pay for other growth items.

This week, committees faced tough decisions as they began debating measures to tackle the shortfall, including:

l Adding £1 to council tax bills, on top of the predicted 4.5 per cent rise.

l Selling public toilets at St Thomas's Kendal; North Lonsdale Road, Ulverston; Coniston Bridge; and Goadsbarrow, on the Furness coast.

l Selling farmland at Hawkshead, Bardsea and Windermere; and a sheltered housing site at Poplar Grove, Ulverston.

l Reducing by 60 per cent grants for historic building repairs, disabled access and environmental improvements.

l Delaying setting aside money for potential land drainage - not the proposed Stock Beck flood lagoon in Kendal - and industrial workshops.

l Delaying the introduction of kerbside recycling.

l Reducing grants to improve private houses.

"What we've got is a quick fix budget," director of finance Mr Jones told the leisure and amenities committee.

"I'm not particularly happy with it.

It gets us out of a tight corner this year, no more than that."

Proposals to slice £60,000 off grants for historic building repair and environmental improvements angered the planning and transportation committee.

Coun Jean Ewing said the move posed a threat to schemes such as regenerating Kendal's historic Kirkland, and described the proposed cuts as "offensive" and "disheartening."

Members decided to explore ways of raising the money through car park charges.

Contract services manager Chris Fidler told the environmental services committee it was "inevitable" that later this year they would have to consider "permanent closure" of some public toilets "in the light of the budgetary situation."

Members agreed to delay kerbside recycling for up to a year, and Coun Phil Lister called for a delegation to visit Whitehall to press for more Government money towards the 'green' project, while Coun Elizabeth Braithwaite said the Local Government Association should be informed.

Director of finance Jack Jones told the Gazette the financial situation was "serious," but explained: "I've avoided using the word 'crisis' because all along we knew we could balance this budget.

It's just a case of how many unpopular measures we would need to take to balance it."

The budget will be finalised on February 20 by the full council.

A strategy to ensure the council can balance its books long-term will then swing into action.

Mr Jones told the Gazette "some big decisions" lay ahead.

"It's difficult because no committee wants to give up any of its services," he said.

"It's about living within our means - we can't afford everything."