Council tax bills in Oxfordshire could rise by more than seven per cent next year.

The county council faces making demands above the rate of inflation just to keep spending at its current level.

The hike would mean the bill for an average band D property for 1999/2000 would be £578 - an increase of more than £40 - with district and parish tax demands on top.

Charles Shouler, Conservative leader on the council, said: "This is a new tax rise by the back door."

The Government has promised to end the "crude and universal" capping of council budgets which led to major cuts in services last year.

The council was forced to axe £10m from services and still put up council taxes by ten per cent. The social services department is still struggling to find cuts of £5.5m.

In 1999/2000 the council hopes to spend £380m - up 6.2 per cent on this year - to keep services at their current level.

Brian Hodgson, leader of the Labour group, said: "I think people will be prepared to pay more to restore the services that the Conservative government cut in such a drastic way.

"This is very much a preliminary stage. The purpose is to set the scene for the various meetings between now and December."

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