Council tax bills are set to rise by 4.5 per cent next year and there are also warnings of cuts to services on the way.

The Government last week announced its local Government finance settlement - which for most local authorities makes up about three quarters of funding but much less in Kingston.

It receives only about £200 per head from the Government compared with the London average of £480 and has to make the balance up through council tax and cutting services.

London boroughs in general fared badly, getting smaller increases than other regions to pay for essential services such as social care, children's services and waste collection.

Sir Simon Milton, chairman of the Local Government Association, which is a cross-party association of English councils, called the increases of about four per cent a year "the worst deal for a decade".

Kingston Council leader Derek Osbourne sees it as little different.

"The settlement is appalling," he said. "We know we will be taking about £8million out of the budget."

He said this would mean the shape of council services would be very different in three years' time from today.

He added: "We will reshape the cost of services so they are more cost effective. But it would be deceiving to say that there will not be cuts."

He would not say where cuts would be made, but he said the council would look at the way it ran its cross-borough initiatives and joint initiatives with other organisations.

He also said social services was the largest spender so this would have to be looked at.

He said the council would be working from now until the middle of January to formulate its budget.

Kingston's Liberal Democrat MP Edward Davey said: "Labour's funding for Kingston Council goes from bad to worse, and that's bad news for council taxpayers and anyone who depends on council services - whether they are old or young."