THERE was no Christmas cheer for West Somerset Council last week when communities secretary Eric Pickles announced the Government's 2013/14 funding settlements for councils across England.

West Somerset's district councillors will meet in the new year to try and set a budget based on the funding allocation, which showed increases to some grants but reductions in others.

Council chief executive Adrian Dyer said the funding package was not entirely clear cut as although the council's spending power seemed to have increased by just under one per cent, the two main grants the council relied on had actually decreased by 3.28 per cent.

Mr Pickles told MPs the worst-off councils in England had received funding cuts, on average, of just under three per cent, while the wealthiest councils faced average cuts of 8.7 per cent for 2013-14.

He did not accompany his statement with any specific funding figures but warned that, overall, councils' spending powers would be 1.7 per cent lower.

West Somerset Council's dire financial predicament has been well documented in recent weeks after experts from the Local Government Association warned the authority could effectively go bust in the not too distant future.

By the council's own figures, although savings could help it limp along over the next two years, its long term future remains bleak, with an estimated budget deficit of £1.28 million by 2016.

Large cuts in Government grants, increased service delivery costs and a low Council Tax base, have all been blamed.

Previous Government funding cuts have already wiped out £1.2 million of funding in real terms, while Westminster has also consistently resisted any attempts by local authorities to increase their share of Council Tax bills.

But in his Commons statement last week, Mr Pickles was adamant the funding allocations to local councils were "fair to the north and the south, fair to rural and urban".

He said all councils had a moral duty to freeze council tax and said from April 2013 local authorities would be able to retain a portion of business rates raised within their boundaries, rather than transfer them to the Treasury.