COUNCIL chiefs have warned of tough decisions ahead after criticising the Government for the size of its annual grant.

Richmondshire District Council says the £3,189,000 it will receive to pay for services in 2005/06 is an increase of 2.5 per cent on the previous year.

"The amount we will be getting effectively means we will not even be running to stand still - we will be going backwards," said Councillor Wendy Morton, chairman of the council's resources committee.

"Government imposes targets but does not allocate sufficient funds to allow us to deliver the services required to meet them."

The grant from the Government represents 51 per cent of the council's funding, with the rest coming from council tax.

Financial unit manager John Sampson said: "With inflation running at nearly three per cent, an increase in funding of 2.5 per cent creates an immediate and obvious pressure on council funding.

"There will undoubtedly be an impact on budget setting for services."