THERE have been claims that vital rural services could face severe cuts if the Government pushes through controversial new reforms to the local government finance system.

Officials at Richmondshire District Council fear the reforms could leave them with the stark choice of either cutting services or increasing the council tax.

And their warning comes just days after the authority warned it faced a possible funding deficit of up to £440,000 as a result of National Census figures which, it claimed, had mislaid more than 4,000 people.

The new problem, which could affect most rural authorities, is highlighted in a new report from the Rural Services Partnership, of which Richmondshire District Council is a member.

The Partnership argues that new proposals for funding local authorities ignore rural deprivation and take too little account of the extra cost of providing services to scattered and remote country communities.

Its report claims there is a false general assumption that urban areas are stricken by the worst forms of poverty while the rural areas are far more affluent.

But it points out that rural areas suffer from low levels of public service provision, poor employment prospects and relatively low wealth.

Access to services is also aggravated by poor transport links and dispersed communities - factors which make the cost of providing those services even greater.

The chief executive of Richmondshire, Harry Tabiner, is also a member of the Rural Service Partnership's Core Group.

He said: "Our main concern is that the criteria for the grants will change, leaving Richmondshire with a financial deficit which would either result in a cut in public services or a rise in council tax.

"Any proposed changes to our funding levels is a matter of concern, especially when we are still trying to resolve the issues thrown up by the Census."

The review of the local government finance system was first launched in 1999.

Local authority responses to the options for change were requested by September this year, and authorities expect the final reforms to be announced by the Government in the next few weeks.