MALVERN Hills District Council says it is counting the cost of one of the harshest government financial settlements in the country.

Council leaders are set to hold urgent talks with the government in London next week after being hit with a 26.9 per cent funding cut - about £1.2 million -over the next two years.

A cut of 7.5 per cent each year had been expected, and the council has admitted it will be “very difficult” to achieve the savings without affecting frontline services to residents.

Leader Phil Grove will ask Eric Pickles, the secretary of state for communities and local government, to reconsider the settlement.

“Compared to others we have been unfairly dealt with,” he said. “We feel we have done well over the last few years so this is an absolute hammer blow.”

Coun Ralph Madden, responsible for finance, called the settlement “unfair”.

“We have an excellent record of managing resources and reducing costs. This settlement is penalising us for that success, instead of acknowledging our efficient financial management,” he said. “The terms of this settlement will make it very difficult to achieve these savings without affecting our front line services. It is imperative that it is reconsidered.”

MHDC’s settlement is among the lowest 25 per cent in the country, with cuts ranging from 13.5 to 29 per cent. The grant for 2011/12 will be £4.1 million, a reduction of 14.6 per cent on this year’s £4.8 million. In 2012/13 it will be £3.6 million.

MHDC has already calculated savings of £800,000, with about £250,000 coming through increased joint working with other organisations.

“Certain key public services will remain ring-fenced we face some difficult decisions,” said Coun Madden. “We have been given a two-year settlement not a four-year one. What will the government do in year three? It makes planning difficult.”

Worcestershire County Council has also been hit hard, losing 24 per cent of its grant over the next two years.

Chief executive Trish Haines has warned that job losses - believed to be in the region of 1,000 - “will happen” and reductions of frontline services were “inevitable”.

This is despite £43.5 million savings already being identified for the next four years.

Finance officers believe their predictions of needing to make savings of £60-70 million in the next four years are broadly correct.

Leader Adrian Hardman said some of the council’s £17.5 million reserves would be used to “smooth the path”, and that the authority will have to become “more productive and efficient”.