Spending cuts will see almost 40 PER CENT wiped off Hyndburn Council’s Government funding over the next two years.
Council bosses are still coming to terms with how the cutbacks will hit residents but have admitted that redundancies are inevitable.
All 410 staff at Hyndburn Council have already received a letter outlining possible voluntary redundancy packages.
Council leaders say the final settlement for the local authorities, published on Monday, was less than expected meaning that they will have to save £4.6m by the year 2012-13.
Opposition leaders have condemned the cuts as "catastrophic" and have suggested they will lead to a complete overhaul of the council structure.
Government cash which the council currently receives in grants will dry up from £11.8m to £7.2m in the next two years – despite Hyndburn remaining one of the 100 most deprived areas in the country.
Communities secretary Eric Pickles has claimed that no authority will lose more than 8.9 per cent of its ‘spending power’ in either 2011-12 or 2012-13.
But this term includes not just grants, but also council tax - revenue which the council generates itself.
Council leader Peter Britcliffe admitted that he had been expecting to see a figure of around 25 per cent, but insisted he will be able to tackle the deficit without raising council tax.
He said: "The Government has inherited a tough job – but we all know that it's one that needs doing to get us out of the recession.
"While I’m sure that some council's will be thinking of how they can put council taxes up to compensate for the loss of grant, I really don't think that would be fair or right given the pressures that people are already facing."
Accusations have been made that the cuts have been disproportionately harsh on deprived northern areas compared to the more prosperous shire counties in the south.
Lancashire County Council will also have to save almost £60m over the next two years which will mainly impact on adult services, leisure services and highways maintenance.
It is understood that Hyndburn’s planning department is under particular scrutiny due to the reduction in planning activity as a result of the economic downturn.
Several members of staff are said to have already accepted redundancy offers.
It has also been suggested that some services will be scrapped altogether and shared with other district councils such as Rossendale.
Opposition leader Miles Parkinson described the news as ‘a bad day for Hyndburn.’
He said: "The cuts are catastrophic. There was a prediction that Hyndburn could be one of the worst affected and I think it will have dire consequences on services.
"I don’t think the council can survive a 38 per cent reduction in its current structure.
"Everything will have to be reassessed.
"The impact is going to be very dramatic. It won't just be back room staff it will be front line services.
"People will certainly notice the difference. It's not just the impact on social services – we’ve already seen a fuel rise, cuts in benefits a rise in utility bills and a wage freeze."
Graham Jones, MP for Hyndburn and Halsingden, described the news as ‘a disaster’. The Labour MP said: "The north doesn’t matter to this government. It’s been abandoned. These cuts are too deep, too fast and are unfair."