A TOWN's mayor has pledged that job losses and cuts to key services will be a last resort if a predicted budget shortfall of £8.8m comes to fruition.

Financial forecasts have warned that Hartlepool Borough Council could face a deficit of almost £9m during 2006/7 due to expected increased spending pressures and a drop in Government funding. The main ways of bridging the funding gap would be to increase council tax, cut services or make savings, including staff redundancies.

But last night, Hartlepool Mayor Stuart Drummond said it was too early to know exactly what the shortfall would be, or how it would be met.

He said: "It's far too early at this stage to tell what the deficit will be.

"Traditionally, at this time of year the finance people are very pessimistic, anyway.

"We have a lot of work to do. We are looking at every department in detail to see where efficiencies and savings can be made."

He said £8.8m was the most pessimistic view, but it could be a lot less than that.

"We don't know what the Government is going to give us in way of grants and we won't know until December," he added.

"But job losses would be a last resort and the protection and improvement of services is our main aim."

At the council's cabinet meeting on Monday, councillors said they did not want to see council tax raised by more than 4.5 per cent to bridge the gap, as the Government would be likely to cap it anyway.

And they said vital services should not be cut.

Councillor Robbie Payne said: "Frontline services should be kept and that is what the public expects to be protected."

And Councillor Ray Waller said: "Those services that are peripheral need to be examined in detail because we could cause a great deal of harm to local people who rely on basic, fundamental services."

The council's scrutiny department will now look at ways to make potential savings.