A decision on whether to increase council tax in Sheffield next year could be affected by the withdrawal of a £1.9m grant to the city council.
The council is facing a £42.7m cut in its revenue support grant - core funding from Government - next year as well as losing the specific grant to cover the cost of freezing council tax.
Coun Ben Curran, cabinet member for finance, said: “What the Government often does when they make these announcements is withdraw specific grants and they are rolling them into the revenue support grant, which by the way is also being cut.”
Coun Curran said no decision had yet been made on whether to raise council tax or not and more consultation would take place in the new year on the council’s budget.
But he said that the removal of the grant was ‘one factor of many’ in the process.
He added: “It doesn’t necessarly mean that we will have to raise council tax.
“Councils up and down the country will do things differently and most of them have not made a decision yet.”
If council tax does go up, it is likely to be below two per cent because that would trigger a referendum.
A two per cent rise on a Band A property in Sheffield would see bills rise from £995.41 per year to £1,015.31 a year.
The council has also lost out on a welfare grant which it has used to help residents in need for the past two years, Coun Curran said.
He added: “It helped the most vulnerable people in the city who needed things like white goods but couldn’t afford them.”
When the Local Government Settlement was announced this week, minister Kris Hopkins said councils would face an average cut of 1.8 per cent in their ‘spending power’.
He said the drive to freeze council tax costs had brought the average bill down by 11 per cent.
It no costs £1,075 for the average Band D taxpayer nationwide, he said.