WYCHAVON District Council is appalled at new Government proposals that will force it to bail out cash-strapped local authorities from the sale of former council houses.

The council is joining forces with other authorities to lobby against the draft Local Government Bill published last month.

If the Bill comes to fruition, it could see penalties for councils which are debt-free - and finance bosses at Wychavon are preparing a response to the Bill to outline their growing concerns.

Head of Financial Services, Sonia Rees, said councils such as Wychavon would, in essence, be punished for being good at managing their finances.

"We transferred our houses to housing associations and the cash raised from selling those properties is ploughed back into providing new ones," said Ms Rees.

After transferring its stock back in 1994, the council has paid off its debt, and has remained in the black ever since.

The council also pumped interest earned into its accounts to keep its tax the lowest in Worcestershire.

"If this Bill becomes law, it means it will be much harder for the council to support its commitment to invest in the region's housing," said Ms Rees.

"Money will simply be siphoned off to areas the Government says has greater need.

"We feel that we are being penalised because we are good at managing our finances.

"Other councils could have done the same as us and we are being asked to bail them out."

"This is clearly unfair and Wychavon will do everything it can to lobby against these proposals and protect the interest of every resident in the district."

The finance services members feel the Bill could also make it hard to earn interest to support its budget plans and keep council tax low. The council's response has to meet the deadline of Friday, August 23.