FURTHER cuts to council services in Oxfordshire are likely after unexpectedly deep cuts in Government funding.

Ministers have changed the way they allocate money to local authorities, in a bid to make the system fairer.

The new system, referred to as “spending power”, not only includes grant settlements but also takes into account other income, including council tax.

But several of Oxfordshire’s councils say the system, announced by Local Government Secretary Eric Pickles this week, takes more money from their allocations than forecast.

Oxford City Council said it would be hit particularly hard, and would have to go back to the drawing board with its budget plans for 2013-14.

Ed Turner, the council’s deputy leader and executive member for finance, said the council faced a 7.4 per cent cut in its Government.

He said the council would have to find about £600,000 in extra savings in 2013-14.

He added: “We thought that they had done most of the chopping but clearly they have come back with more. This is devastating news.

“The fact Oxford City Council has been singled out for the biggest cut in the county is extraordinarily depressing and is going to make it much harder for us to achieve our budget.”

He said the council would try its “darndest” to avoid compulsory redundancies.

Oxfordshire County Council is also facing a bigger cut than expected, losing about eight per cent of its Government grant.

Council leader Ian Hudspeth said officers still had to determine the exact amount it would lose. Asked if he could still guarantee services and jobs, he said: “We will be looking at what impact the spending review has on funding overall and then making our decisions through the budget process.

“We always try to maintain the services that are frontline, popular or people really appreciate and make savings in back offices, but if you keep reducing the back office there could be potential impact on the front office.”

The four other district councils said their funding settlements were not as bad as they feared, and two will benefit from the Government’s new system.

Cherwell’s executive lead member for finance Ken Atack said Government funding had been cut by five or six per cent, but officers had modelled for a cut of more than 10 per cent.

He said: “This is quite a modest reduction from the modelling and we’re conformable with it, but next year’s settlement could be high – a 12 or 14 per cent reduction – and that will be a challenge.”

Vale of White Horse District Council could not say last night how much its grant had been cut by. Leader Matthew Barber said: “We had taken a reasonably cautious approach over previous years and going forward we are reasonably content with the settlement, although we would always like more.”

Once all factors are taken into consideration, South Oxfordshire District Council will see a nominal increase of £6,000.

West Oxfordshire District Council was also unable to confirm its funding situation last night but overall, its income from Government is set to rise by 2.8 per cent, or by £255,000, from £9.062m to £9.316m.