THE recent budget-setting process and Council Tax increase has evoked criticism in some areas. Perhaps I can explain the reasoning behind this to your readers.

Due to the job evaluation (a process forced on us by Labour legislation) which should have been completed long ago, we have had to provide almost £5 million over a period of time to cover this liability. Can I point out that a one per cent increase in Council Tax provides the Council with £695,000. Similarly as a result of this legislation we have increases in Pension and National Insurance costs.

The charges for heat, light and power have rocketed beyond expectation, as well as huge increases in the costs of recycling. Much of this, particularly the energy costs, are due to the very weak state of our currency compared to the Dollar or Euro.

The council has an income stream of around £440 million a year. Obviously we do not spend the money the moment it comes in. Generally we are investing about £50 million at any one time.

We have been receiving annual interest on investments circa 5.5pc equating to £2.75m per year. The current rates available are not much in excess of one per cent so there is an income shortfall to us of about £2.25m. As I have previously explained, one per cent Council Tax increase gives us £695,000, and in order to make up the shortfall we have had to add almost 3.25pc to your bills. Had we not done this we would not have had a balanced budget.

We have made serious procurement efficiency savings in our budget and these will continue. To anticipate a very logical question, if and when interest rates start to increase again will that mean that due to the additional income the council receives, that will be passed on to residents as a benefit to keep Council Tax right down? The answer is a resounding YES Cllr Peter Redstone Executive Member Resource Bury M.B.C.