RESIDENTS in York will tonight discover whether their council tax bills will rise as councillors debate rival budget proposals.

City of York Council must save more than £24 million over the next two years, with 240 jobs set to be shed, and its ruling Labour group has tabled a 1.9 per cent council tax rise after saying taking a Government freeze grant would leave a £560,000 shortfall and potentially more service cuts.

Opposition groups want council tax bills frozen, with the Conservatives saying New Homes Bonus payments and leftover cash in the council’s Delivery and Innovation Fund would allow the £778,000 Government grant to be accepted. Their leader, Coun Chris Steward, has said the council should "stop interfering and let people spend their own money" by keeping council tax at 2013/14 levels.

The Liberal Democrats will say the £560,000 gap created by not raising council tax could be bridged by cancelling plans to put £850,000 more into the council’s reserves.

The Green group will call for a referendum on a 2.9 per cent council tax increase, saying such a rise would be needed to safeguard “vital” services and their proposal would mean residents deciding whether they were prepared to pay more to protect services.

Labour says its budget would provide an extra £2.5 million for adult social care and £2.3 million for road and footpath repairs, with the York Financial Assistance Scheme receiving £100,000 to help struggling residents and money allocated for improving streetlights, children’s play areas and skate parks.

However, it would see the end of the free Minster Badge parking scheme, a £30,000 cut for children’s centres and reduced subsidies for York Theatre Royal and York Museums Trust.

Coun Nigel Ayre, Lib Dem finance spokesman, said their council tax amendment gave Labour “a very simple choice” between freezing bills or putting unnecessary money into reserves, and rejecting the council tax offer would mean York had turned down £3.5 million of council tax grants since 2011.

He said: “Our plan would still leave reserves more than £400,000 above minimum recommended levels. If accepted, it would show the council actually cares about residents in these difficult economic times.”

Green councillor Dave Taylor said a 2.9 per cent rise would mean residents paying 22p more weekly than under Labour’s plans. He said: “We’d rather see a return to proper funding of services. We believe residents would step up to the Government’s referendum challenge and say they value local services.”

The Conservatives have pledged to fund more salt and litter bins, an extra green bin collection in winter, additional funds for pothole repairs and gulley-cleaning and to keep Minster Badges. They want to cut funding for the Reinvigorate York facelift scheme to allow more money to be spent on public services, with Coun Stewrd saying this was more important than "vanity projects".

Coun Dafydd Williams, cabinet member for finance, said opposition parties had voted against Labour plans to reverse cuts and put more money into public services in the past, and were now calling for “unsustainable sticking plaster solutions”. Council leader James Alexander said other parties' amendments would “halt investment which supports jobs” and claimed they now “appear to support” the Arts Barge scheme, having opposed it in the past.