REDDITCH Council agreed a three per cent hike on its portion of council tax this week.

But Tory leader Carole Gandy criticised the ruling Labour group for applauding the lower than average increase following the recent emergency cuts to services in the town.

Council leader Phil Mould claimed the rise was a cause for celebration, as it was less than increases demanded by the county council and the police and fire authorities. They have all demanded hikes of almost five per cent for their share.

"We are still delivering more services than any other authority in the locality, and still our council tax rise will be only three per cent," he said.

"This council is thriving and back in business."

But Mrs Gandy did not agree: "I find it amazing Phil can say this council is thriving when we sat in this chamber and looked at cuts," she said.

"I do not believe those people who were made redundant will see this council as thriving."

Liberal Democrat leader Malcolm Hall urged caution, saying now the council had come up with a rise likely to be less than the national increase, it could result in more cuts later.

Redditch Council's tax increase will mean residents living in a Band D property will have to find an extra £5.25 a year.

Meanwhile Worcestershire County Council has increased its portion of the tax by 4.94 per cent, which will help plug a £8.7 million funding black hole.

But county leader George Lord said he could not guarantee cuts would not be made in 2007/8.

"Nor can we guarantee we will be able to meet all the promises we made in the Corporate Plan that laid out our priorities for the next four years," he said.

"With this increase, we are setting one of the lowest council taxes in the country - however, I feel for our pensioners, who are faced with the same gas and electricity pressures as us, but have static pension increases."