Shocked Bradford finance chiefs were in turmoil today over a shortfall of millions of pounds in its next budget.

It is expected to mean about £3.5 million worth of cuts and an inflation-busting 4.5 per cent Council Tax increase.

The Government yesterday announced that it expected the council to manage on £441.31m in 1999/2000.

In July Council officers had predicted that it will cost £465.7m just to maintain existing services.

But today City Finance Officer Steve Morris said his estimate had changed since July to a lesser figure but he could not comment on the amount or degree of the decrease or the factors which had changed it.

But Council leader Councillor Ian Greenwood said he believed there were "anomalies" in the way the authority's spending had been calculated by the Government and he was seeking urgent talks with them.

He said he was "gravely disappointed" by Bradford's settlement as there appeared to be anomalies over the number of schoolchildren in the district used in calculating the settlement figures.

He said: "We are not clear why there are anomalies but it seems to be based on the data which the Department is using to calculate the figure."

They could not understand why other metropolitan authorities had been given a 4.8 per cent spending increase but Bradford only received 3.5 percent.

The Council's Revenue Support Grant - the money it receives from the Government to help provide services - will rise slightly to £242.104m.

The authority will have to raise the remainder of its budget from Council Tax, Business Rates and other sources - leaving some opposition councillors predicting large Council Tax rises or bigger cuts. They said the reduction in the projected budget had never been reported to them.

But the Deputy Prime Minister John Prescott said he expected authorities to keep Council Tax increases at an average 4.5 per cent - or face financial penalties.

The Government says it expects the authority to spend £233.9 million pounds on education - 4.3 per cent more than last year.

The leader of the Council's Tory group Councillor Margaret Eaton said the situation was unprecedented.

"There are sometimes adjustments but they are never on a large scale.

"We are talking about major cuts and Coun Greenwood is living in fantasy land if he thinks they are not."

Leader of the Council's Liberal Democrat group Councillor Jeanette Sunderland said: "Despite all the hype and spin, Labour has not delivered the promises. And to top it all, Council Tax payers will see their bills rise by about five per cent - double the rate of inflation, and to pay for a lower quality of service.

"The Council already has severe financial problems and services would be devastated by this."

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