SAVINGS of £2m must be found if a council is to balance its books for next year's budget.

In an unprecedented move, hundreds of Hartlepool residents are to be asked for their views on council spending and priorities in the hard choices that lie ahead.

Hartlepool Borough Council says it will be the biggest budget consultation exercise ever.

The local authority has a budget of £115m in the current year, but it is estimated that £2m of savings will have to be identified to balance the books for 2005 to 2006, based on predictions of how much it expects to receive from the Government in grant support.

The consultation exercise involves sounding the views of residents, councillors, business people, key local organisations and council workers to see what they think the council's priorities should be.

One of the exercises will involve 300 residents, selected at random, being interviewed next month.

This technique, called Simalto, which has not been used by the council before, gives individuals the opportunity to make choices about either reductions or increases in spending on local services.

The Mayor of Hartlepool, Councillor Stuart Drummond, said: "We do have a very difficult and challenging few months ahead before determining the budget priorities for the forthcoming financial year.

"The Simalto exercise is just part of the overall consultation process and the findings will be fed into the council's cabinet to help make its recommendations.

"The bottom line is that we simply do not think we will have enough money to continue funding all services to the same level next year, so we have some tough choices ahead.''

He added: "However, we are being very open about this and putting all of our cards on the table. By doing it this way, hopefully the people of the town will recognise the dilemma we face and let us know what they think the priorities should be.

The Government has warned it will cap councils that set unnecessarily high council tax levels for the forthcoming year.