Thanet District Council plans to keep its part of residents’ council tax bills at the same level for a fourth consecutive year – despite a further 7.4 per cent reduction in its annual grant from central government for 2013/14.

The council’s cabinet is withdrawing its earlier recommendation for a two per cent increase in council tax, equivalent to £4.20 extra per year for a Band D household.

Cabinet will make its formal recommendation when it meets on Tuesday, January 22, with the final decision being taken by the full council on Thursday, February 7.

The latest government cut means that the ‘formula’ grant will have fallen from £13.3 million three years ago to just £8.5m from April this year.

Official figures reveal that the grant will be reduced again for 2014/15, to £7.1m, an overall drop of 47 per cent.

Cllr Rick Everitt, cabinet member for finance, said: “When we considered the draft budget last November we needed to find almost £800,000 to balance the books for next year, and at that stage an increase in council tax looked unavoidable.

“We had also pencilled in a £580,000 contribution from the council’s New Homes Bonus reserve, although if possible we would have preferred to spend that money on one-off initiatives to improve Thanet for the benefit of residents and visitors.

“This was the prudent position for us to take, based on the information to hand at the time.

“However, given the continuing pressure on household finances we were very clear that we would continue to search for other ways to close the gap, including identifying additional back-office savings and finding other sources of funding. We have now been able to do this.

“Following this work I am delighted to announce that we have fully closed the gap for this year.

“The settlement is slightly better for 2013/14 than anticipated but is, unfortunately, much worse for 2014/15.

“Cabinet is now able to recommend to council that there should be no council tax increase and no additional draw-down of the New Homes Bonus to fund our existing services in 2013/14.”