COUNCIL tax looks set to rise by around 16 per cent over the next four years in Dudley as council bosses try to tackle the biggest funding shortfall in the authority's history.

Senior Dudley Council bosses say they have revised budget proposals and managed to slash the forecast black hole in funding the authority faces from £50million to just under £21million.

But they say increasing council tax for the first time in six years is vital to bring more money into the cash-strapped council's coffers.

Authority chiefs are proposing a rise of just under four per cent each year for the next four years. Despite this they say residents in the borough will continue to pay the lowest council tax rates in the West Midlands and some of the lowest in the country.

Councillor Pete Lowe, leader of Dudley Council, said: “Dudley has a history of offering exceptionally low council tax rates and this has been something we have maintained in recent years by continuing to freeze rates.

"Due to the continued reduction in funding from government, which leaves us with a significant shortfall moving forward, we are proposing to increase rates this year."

He added: "We have worked relentlessly and left no stone unturned in a bid to plug the funding gap we have faced due to government funding. We have reviewed our initial budget proposals and we are pleased to have made such good progress.

"Our transformation project to change the way the council delivers services will now pick up further pace as we continue to respond to the toughest financial position the council has ever experienced.”

The four per cent council tax increase planned for 2016/17, which is expected to be equivalent to 77p more per week for a band C property, will comprise of a 1.99 per cent planned increase and will also see the council taking up the government's proposal to increase rates by another two per cent which will go specifically into the adult social care budget to help the borough's elderly.

Councillor David Sparks, Dudley's cabinet member for finance, said: “"Due to an ageing population and reduced funding, adult social care budget pressures are huge across the whole country and this precept will help to meet the needs of some of the most vulnerable people in our community.

"Anyone who is elderly, or who has elderly relatives or friends, knows that caring for our increasingly older population is the most serious problem our society faces. We have to face up to the fact that this will cost us money."

In addition to the budget boost estimated from the proposed council tax hike - better management of social care contract procurement, which will reduce the impact of the introduction of a national living wage, is also set to improve the financial picture and is forecast to save around £13million.

The council has also welcomed a better than previously forecast government settlement after local councillors lobbied Whitehall.

Cllr Sparks said: “We are pleased the government has listened to the concerns of Dudley Council and other local authorities across the country. The settlement, together with the fact that we have not sat on our hands but have instead found significant further savings, means the budget position is much improved on where we were a few months ago.”

However - finance bosses say there are still huge challenges ahead to balance the budgets in the coming years.

Savings of £8million are proposed for 2016/17, moving up to £18million by 2017/18 and £20million by 2018/19 - in the authority's budget report. But it forecasts there will still be a deficit of £23m by 2019/20 if additional savings cannot be found.

The budget proposals will go before the council’s cabinet at a meeting on Monday January 18 at 6pm.