IT'S as bad as we feared and could still get worse.

That was the message from Dorset County Council's cabinet at a meeting on Wednesday morning (15) to recommend a multi-million pound savings package to the full council.

Council leader Angus Campbell said he would have to speak up for "the honour of Dorset" after Local Government secretary Eric Pickles MP told the House of Commons on Monday that Dorset County Council was the only authority in the country to have its spending power increased.

He said: "We are still the fifth lowest funded council in terms of head of population.

"Our estimation of how much we had to save over the next three years of £50 million pounds is about right.

"I feel for the honour of Dorset I will have to be quite clear on where we are.

"There is a feeling across the country that Dorset has got a break but if we have there must be some pretty bad breaks out there."

Chief financial officer Paul Kent said he feared the council's financial position could become significantly worse.

"We have to find around £22 million of savings just to stand still.

"The settlement effectively means our strategy of trying to find savings of £50 million over three years and £27 million in the first year is still the best strategy we have.

"It could be worse than that. I will be saying to full council this afternoon that we have got to press on and make the savings as quickly as we can."

He said the government’s calculation of “increased spending power” included the council’s own income from council tax and grants previously given to the NHS, which he said masked a real terms reduction of about £9m to the formula grant.

And he added that funding previously given to the council had now been included in the Dedicated Schools Grant, bringing the council’s formula grant settlement down from £74m to £65.5m.

“The true reduction is more like 13 per cent. We were predicting we would go down by between 13 and 15 per cent. It may be at the lower end of that range, but it is still significant as far as we are concerned,” said Mr Kent.

A focus on spending power ignored the council’s expenditure, he added, arguing that inflation and demographic changes, including an expected rise in the number of elderly people and those with learning disabilities, were likely to increase pressure on council resources.

He said the government’s attempt to simplify a raft of specific grants had lost the council about £5.3m of funding, and left officers still trying to trace about £17m.

“I’m not saying at this stage that they will be lost, but at this moment we can’t trace them and we are very concerned about that,” he said.

Resources chief Cllr Spencer Flower called on councillors to be courageous in dealing with a problem he said was not of the council's making.

"The key message here is that it is not going to get any better. In fact it may get worse. I didn't think that was possible but it seems nothing is impossible nowadays.

"We do need to have a balanced budget. The £50 million pounds is not going to go away. We have got to get on with it."

He added: "The longer we delay the greater the pain. I think we owe it to the staff that if we have to take tough decisions they need to be aware how tough they are and how they will impact on their lives."

Union members waved placards on the steps of County Hall as council leaders arrived for their meeting.

GMB Dorset leader Gary Pattison called for the suspension of expensive projects including the £36 million Purbeck Schools Review to save jobs in the short-term.

Unite Dorset boss Paul Kimber said if staff were laid off now valuable skills could be lost if the council was forced to recruit later on.

A meeting of the full council will vote on the cabinet's recommendation at a meeting this afternoon.

Visit our Interactive section for the government's Plain English guide to the settlement and the full breakdown of the spending allocations or click the link below for a .pdf

Funding settlement 2011-12.pdf