WORCESTER City Council says it is on-course to save £4.5 million over the next five years but has warned more cuts could be on the cards.

Those holding the purse strings are concerned about the prospect of reduced government grants in future years and if they are as bad as they fear it could mean more difficult decisions will have to be made.

Council tax could rise, as could charges for council services such as planning applications, while the cost of car parking in the city could also soar for residents and visitors.

But councillors and officers hope to avoid any more service reductions in the short term at least, and solving problems with the controversial concessionary bus pass scheme, currently costing the city about £600,000 a year, would go some way to helping balance the books.

Because of differences in government funding, the buss pass scheme has cost the city council money while other districts have profited.

Barry Mackenzie-Williams, portfolio holder for performance, innovation and efficiency, said: “Thanks to the decisions made last year and the budget reductions implemented this year – £3.1m with a further £1.4m over the next four years – we are now in a much stronger position to cope with the impact of the recession and the forecast government cuts in public spending and grants to local government.

“However, the level of uncertainty and the possibility of further reductions in government grant will require careful review of our corporate plans.”

The city council’s medium term financial strategy is due to be considered by councillors at the performance management budget scrutiny committee on Tuesday.

In the report going before the committee, acting head of paid service Alan Stuttard, and head of finance Grahame Lucas said they believed the cuts that have already been made will ensure the council will balance its budget during the next financial two years.

However, they too are concerned that further budget cuts may be needed from 2012 onwards if central government continues to reduce the council grant support and the economy does not recover as they have forecast.

As a result, decisions about increasing council tax for Worcester residents and maximising income through fees and charges such as car parking will “need to be carefully considered”.