But council leader Cllr John Peach vows that the local authority will still deliver value for money and improved frontline services.

Peterborough business leaders and residents will continue to benefit from one of the country's lowest council tax increases, plus additional spending on local services in the coming year.

For a second year in succession, Peterborough City Council is proposing a council tax increase of just 1.4 per cent while spending an extra £9.5 million on services in 2008/09.

The double benefit comes through streamlining council business practices to achieve savings of £5.8 million in the current year; £5.8 million in 2008/09; £7.5 million in 2009/10; and £14 million in 2010/11.

The frontline services that will benefit from the extra funding will include:

• An extra £1.2 million for adult social care;


• £870,000 on improved street-cleaning and related works


• £60,000 next year, rising to £240,000 the following year, for neighbourhood regeneration


• £460,000 to improve waste management and recycling.

City council leader Councillor John Peach said: "Some people have expressed doubts about the city council's ability to deliver higher levels of services while keeping council tax increases to a minimum.

However, our medium term financial plan to 2010/11 is based on the philosophy of minimising overheads, reducing bureaucracy and improving value for money.

"This progress is being made despite what we see as a 'miserly' one per cent average real increase in Government funding over the next three years.

The Government has again failed to give us our fair share of funding, leaving us £5.3 million out-of-pocket for next year. Government funding also fails to recognise the pressures we face through our growth agenda, as well as the impact of migration.

"We will ensure that Peterborough tax-payers receive value for money while benefiting from improved frontline services as we keep council tax increases as low as possible."

The city council is also fully committed to investing in new resources to secure Peterborough's ambitious growth targets to provide 25,000 new homes and 20,000 additional jobs in the 20 year period from 2001 to 2021. For example, it has recently installed new electronic document management systems to speed up administrative processes.

It is also working closely with urban regeneration company Opportunity Peterborough, economic development agency Greater Peterborough Partnership and the wider business community to encourage jobs growth, business relocations and new start-ups.

For example, the city council is closely involved in the creation of an innovation centre that will encourage the creation and growth of new businesses concentrating on much-needed environmental technologies.