SWALE Borough Council may have to sell its headquarters as part of a cost-cutting exercise.

The Tory-led council is looking at ways of finding £1.5million in order to maintain current services in the next financial year 2006/2007.

Swale House, the council’s Sittingbourne headquarters, could be sold and then leased back by the council - meaning workers will stay in the building as tenants.

Another idea is to rent out empty space to other organisations.

Swale council leader Cllr Andrew Bowles (Cons) said: "We have asked the budget working party to look at ways to save money and save revenue. We are looking at everything, including Swale House."

Working party members were also looking at how to maintain the council’s statutory services, other services which it was not obligated to supply, council tax levels and the amount of grant it was likely to receive from central government.

Cllr Bowles said the authority needed to find £1.5 million, make cuts worth that amount, or agree on a combination of savings and ways to raise money.

Officials may look into how much council tax can rise without incurring the Government’s capping penalties. The suggestions have led to criticism from opposition councillors.

But Lib Dem group leader Cllr John Stanford said: "They are scratching around for any way to get money back to cover their financial incompetence."

He predicted that tax payers in the borough would suffer because service provision would be poorer.

Deputy Labour group leader Cllr Roger Truelove said: "They have got themselves into this mess."

Both opposition leaders blamed the Tory-controlled executive’s decision to cut the borough council tax by three per cent three years ago for many of council’s financial problems.

The reduction in council tax revenue had caused a growing shortfall annually since then.

But Cllr Bowles said the decision to cut council tax bills was made after a survey showed that residents favoured the idea.

He blamed the Government’s failure to give the council an adequate annual grant and its demands on local authorities to provide more and better services.