COUNCIL tax could be increased by 3.85 per cent as Town Hall chiefs struggle to make an extra £8.8 million of cuts.

It is one of the options facing councillors as they prepare the town's tough budget It comes after Bolton Council’s executive approved a £34.6 million cuts programme — including the loss of 486 posts and service cuts.

Now councillors are being asked to choose between whether they raise council tax, spend reserves or make cuts to services.

Bolton’s ruling cabinet will meet on Monday when they will choose between eight financial options and will also decide the services which will be affected by the cuts.

Whichever financial choice they make will mean cuts to services but the higher council tax is raised and the more reserves spent, then the fewer cuts will be needed.

Bolton Council will not raise its council tax level higher than two per cent, which is the cut-off point when the authority would have to hold a town referendum on the change.

But because waste and transport costs are calculated separately, the actual rise for homeowners could exceed two per cent.

Options are a rise of 0.7 per cent, of 2.4 per cent, of 3.5 per cent and 3.85 per cent.

Depending on which option they choose, a band D householde could pay between £9.99 and £54.32 extra per year and a band A resident would pay between £6.66 and £36.21 more each year.

Raising council tax by 3.85 per cent would generate £2 million extra in 2013/14 and £3.1 million in 2015/16.

Town Hall chiefs have drawn up a list of services that could be affected by cuts, which have been separated into three categories — £4.4 million of difficult cuts, £2.5 million of harder cuts and £3.7 million of very hard cuts. Councillors also have to decide whether to spend £10 million reserves at £2 million per year or whether to save the money to be used as a lump sum for capital investment.

Sean Harriss, chief executive of Bolton Council, said: “Clearly the council faces a series of difficult and complex decisions when they deliberate the 2013/15 budget.

“There are choices around levels of savings from services where those savings can be found, there is a potential increase in council tax levels and the best way to use one-off resources.”

Council leader Cliff Morris said: “Three authorities in Greater Manchester have announced council tax rises — Manchester by 3.7 per cent, Oldham by 3.5 per cent and Rochdale by 3.5 per cent.

“Labour-run Salford and Tory-run Trafford are both planning to keep the tax at 2012-13 levels. Prime Minister David Cameron had called for national freeze in council tax bills and the government has offered Bolton Council a £1 million grant if it agrees not to increase tax this year.

Cllr Morris added: “I am disappointed that we are left with another £9 million to find. It is a big challenge.

“There is only so much fat on anything and we are down to the bone now. We are now looking at areas where we possibly wouldn’t want to do these cuts. It is a big challenge for us having to find this extra amount.”

n See tomorrow's The Bolton News for more details of the budget process and the tough decisions councillors face