FUTURE years are likely to get tougher for Dorset Council with a predicted Government squeeze on spending.

It could mean maximum council tax rises being imposed on residents yet again, or at worse, the authority becoming insolvent – although Dorset has said that it is a long way from that position.

Meanwhile the Lib Dem controlling group is pressing on with job cuts and re-shaping the way departments work in an attempt to save money.

Latest figures have shown a move in a positive direction with revenue budgets £6.7million overspent, an improvement of £4.1million.

Councillors are being told that some of the change has come about by taking money from reserves.

Dipping into that pot has resulted in a drop in available general fund reserves from the desirable level of 10% of the overall council budget to 7.6% – a fall from £41.7million to £31.6million.

There is also pressure on the council's capital programme with expensive harbour works planned at Weymouth and Lyme Regis and a commitment to setting up new reablement homes for the county's elderly population.

Finance portfolio holder, Chickerell councillor Simon Clifford told a Cabinet meeting that other worries included a lack of progress with the Department of Education over schools budgets.

He said that on the positive side the amount of money owed to the council had improved although income from council tax was 0.2per cent down compared to last year.

"However, this report is looking back and going forward there is concern about Government spending and how we are going to fare after the Comprehensive Spending Review. The suggestion is 'not well'" he said.

The meeting heard that arguments might also be on the horizon with the local NHS over who picks up the bill for some aspects of what is known as Continuing Healthcare funding.

Cabinet member for health and housing Cllr Gill Taylor said there had already been additional costs of almost £1.2m because of this – some of which, she believed, should have been paid by the NHS, not Dorset Council.