COUNCIL services in the New Forest are set to be cut by up to £1m, the Daily Echo can reveal.

Large savings need to be made by the district council, which will spend the next few weeks deciding where the axe will fall.

Members of the council's ruling Cabinet yesterday blamed the government, saying local authorities were not being given enough money to fund new responsibilities.

They also complained that proceeds from the sale of council houses would in future go straight to Whitehall, depriving town halls of vital cash.

Now the authority must prune its budget to balance the books and avoid a hefty increase in the council tax.

Council leader Mel Kendal said: "The only way we can fund some of our statutory obligations will be to start cutting services in all sorts of areas.

"It's not of this council's making, but we must consider which savings will have the least impact."

Maureen Robinson, leader of the opposition Liberal Democrat group, said after the meeting: "The government needs to have a good look at what it does before it turns the screws on local councils. We don't need to be micro-managed in the way it feels we should be."

Dave Yates, the council's chief executive, said: "Almost everyone in local government feels they're being forced to work in a virtually impossible system."

Councillors were warned that cuts could have to be made in the provision of social housing in the Forest.

Jim Bennett, policy manager for housing charity Shelter, said: "A rural housing crisis is significantly affecting the sustainability of communities by forcing young people and families out of their home towns and villages.