CASH-strapped Shepway Council is being offered a £650,000 lifeline by Tory-controlled Kent County Council, following the intervention of party leader Michael Howard.

The Kent Messenger Group can reveal that Tory leaders at KCC have drawn up a rescue plan which, if accepted, could help ease Shepway’s dire financial plight.

The revelation comes after the Government said it planned to cap Shepway for setting a budget leaving council tax payers facing a 29 per cent hike in bills.

The KCC deal could - in theory - shave the equivalent of ten per cent off Shepway council taxpayers’ bills.

But it will not mean a discount for residents. Under the proposals, KCC is offering a package of measures it believes will offer Shepway the chance to cut spending in key areas.

According to a confidential memo, KCC became involved after Conservative leader Mr Howard approached it to see if “KCC were able to offer any support".

The memo was written by KCC’s finance spokesman Cllr Nick Chard (Con) to fellow Tory councillors. In it, he says: “Michael Howard, Sandy [Bruce-Lockhart] and I have been in discussion for some weeks concerning Shepway District Council and their council tax increase.

"Michael has been rightly concerned for Shepway residents and asked if KCC were able to offer any support.”

As a result, KCC has presented Shepway with three savings options.

One involves the council using KCC’s in-house trading company to provide various supplies and services, saving £300,000 through bulk buying discounts.

The second involves Shepway using KCC as its contractor for grounds maintenance, possibly saving £200,000, while a third would see KCC offering to use its experience to cut contact centre and other administrative costs totalling £150,000.

In a letter to Shepway council leader Linda Cufley (Lib Dem), Cllr Chard says: “We have always believed there is much we can do in partnership with our colleagues across the public sector in Kent…that would be to mutual benefit and to the people of Kent. We would like to work with you to explore these opportunities and at the same time, alleviate some of the difficulties you currently face.”

Cllr Chard told the KM Group talks would take place next week between the two councils.

He added: “This is not a handout and there will be no cost to other council taxpayers. We have always made clear we will stand up for all residents in Kent where we can.”