A Banbury councillor has called the row over a proposed asylum seekers centre at Bicester a taxpayers' scandal.
Cash-strapped Cherwell District Council has set aside council tax revenue to fight Government plans to house 750 refugees at a former military base at Arncott.
But the Government is also spending taxpayers' money on pushing the proposals through, said Kieron Mallon, a Banbury town, Cherwell district, and Oxfordshire county councillor.
He said public money was being spent by both sides.
He said: "Cherwell had to budget £100,000 this year on the issue and could well be faced with the same next year."
The council recently announced a 26 per cent increase in council tax for next year after investment income fell short of expectations and costs increased.
Mr Mallon said people who were not directly affected by the asylum centre plan should be aware of the situation.
He said: "The planned centre might not be in their backyard, but they are paying to fight it.
"It is obscene that we cannot help ordinary villagers and townsfolk with better facilities because of a lack of funds, while the Government can spend millions on education, recreation, and health for asylum seekers."
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