MILLIONS of pounds will be spent on capital projects in the Stroud District despite central government funding for the council decreasing.

Over the next four years, the council is planning to spend £20.6million, funded through use of its reserves and a 2.62 per cent increase in its share of council tax.

The council’s budget proposals will be considered by members of its Strategy and Resources Committee on Thursday.

Included in the plans is £8million to be spent on new homes to rent, £8.7million on projects aimed at boosting the economy, including Littlecombe in Dursley and £3million on the next phase of its canal regeneration project.

Council house building is also expected to continue with a £32million investment planned which will be funded through the housing account.

Stroud District Council’s share of the overall council tax bill amounts to about 12 per cent with the 2.62 per cent increase working out at £5 extra per year.

Councillor Steve Lydon, leader of Stroud District Council, said: “As many people are aware, councils across the country have had to cope with huge government funding cuts with more to come.

“We are under relentless pressure with the situation worsening over the next four years.

“The government is removing £1.3million from our budgets meaning that in three years’ time we will be in the somewhat unusual position where we actually have to pay half a million pounds back to them, leaving us with a funding gap of nearly £2million.

“Against this background we obviously need to do our best to continue to provide the services to our residents.

“With this in mind we’ve put together a package of measures which will invest in the local economy, including some which aim to help improve the district and simultaneously build long term income streams for the council to offset the reduction in the money we receive from the government.

“At the same time we’re proposing to increase council tax bills by about 10 pence a week for the average household to cover our regular services.”

Central government funding to the authority through the revenue support grant will fall below £500,000 for the coming financial year – compared with about £1.3million last year and more than £1.5million the year before.

In order to fill the gap, and as well as raising council tax, Stroud District Council is proposing to set aside £5.4million of its reserves to support its budget.

As part of £1.2million budgeted for environment and health projects, £300,000 has been earmarked for a cycling and walking plan which includes the Dursley Greenway cycle route between Cam and Uley.

The council is also proposing to spend £60,000 on youth services and £20,000 on the Warm and Well initiative to promote energy efficiency and tackle fuel poverty.

The committee will meet at 7pm on Thursday to discuss the plans.