WINCHESTER councillors have approved the district's first council tax rise since 2011 as part of a budget which relies increasingly on income from unbuilt developments.

Conservative chiefs are using a 3.47 per cent rate hike and profit expected from schemes like Station Approach to plug a £2.4 million deficit amid unexpectedly deep cuts from Westminster.

Winchester City Council's government grant is being slashed by 34 per cent next year, and Tory chief Stephen Godfrey told full council last night that income from business rates has been hit by red tape.

Lib Dems accused the council of failing to fund better public consultation or vital procedural changes recommended by investigator Claer Lloyd-Jones in the wake of the Silver Hill court battle.

The council tax rise, costing a Band D property owner £4.38 extra per year, has helped cut the authority's deficit forecast to £1 million by 2020/21.

Cllr Godfrey said: "The long-term financial plan of this administration – to support, maintain and boost the local economy of Winchester – is still the best way for the council to proceed. More jobs, more successful businesses, more income for the council."

However, he added: "With government funding disappearing faster than expected, our reliance on our programme of major projects becomes even more important. This budget relies heavily on the timely redevelopment on the Station Approach area."

The Lib Dems forwent their usual tactic of tabling budget amendments to reject it outright.

Group leader Cllr Lucille Thompson (below) said: "The whole tone of this budget is one of complacency and unwillingness to change.

"There needs to be a major change in the way things are run and that will not be achieved by small amendments but rather by a fundamental review of what the council does and how it spends local people's money.

"Claer Lloyd-Jones made 13 key recommendations but there is nothing here to address these.

"We think the council is trying to do too many projects with too little capacity."

Cllr Godfrey has accepted the Lloyd-Jones report after initially claiming it contained inaccuracies. He has previously said that money would be found to implement its recommendations when it is agreed by full council.

Last night's meeting was the first political showdown before May 5's 'all-out' election, which will see every seat being contested to fill a smaller 45-seat council, rather than the usual third of councillors seeking re-election.

Labour group leader Cllr Janet Berry said: "Residents of Winchester will be faced with an increased council tax with no extra services to show for it, whilst government cuts revenue support grant and at the same time attempts to asset strip councils that have retained their council housing."

The Tories outvoted the Lib Dems and Labour on the budget by 30 votes to 21.

In 2016/17 it means the average district council tax will be £2.51 per week. Including Hampshire County Council, Hampshire Fire and Rescue Authority, the Police and Crime Commissioner and town and parish councils, the average weekly rate will be £28.93.

Full council also backed the 2016/17 housing revenue budget, praised by some Lib Dem rivals for protecting core repairs amid challenging government changes, and treasury management strategy, which dictates the authority's outside investments, borrowing and risk assessment.