YORK'S council tax bills are to rise by 1.9 per cent after budget plans by city leaders - including £23 million of cuts and savings - were voted through last night.

City of York Council will again turn down a Government grant, worth £778,000, which was on offer if bills were frozen. Its ruling Labour group said accepting it would have left the authority needing to save £560,000 more.

Conservative and Liberal Democrat proposals for no council tax rise were blocked at the Guildhall budget meeting, as were plans by the Greens to force a referendum on the issue.

Labour's plans, covering 2014/15 and 2015/16 - when the council expects to shed 240 jobs - are set to replace the free Minster Badge parking scheme with paid-for passes. Funding for children's centres, York Theatre Royal and York Museums Trust will be cut, although there will be more money for areas including road and footpath repairs and the York Financial Assistance Scheme.

Opposition councillors said Labour had prioritised their favoured projects over basic services. Council leader James Alexander said only his party had an economic vision for York, with opponents having "no ambition", and proceeds from higher council tax would pay for more adult social care.

He said the council had needed to save £74.3 million since the last General Election and Government funding could fall by £13.6 million over the next two years, saying: "With every year that passes, the decisions get tougher - Government cuts for York are actually getting larger - but we will see it through and York will emerge stronger.

"We're beyond efficiency savings alone, but we're taking decisions now to secure services in the long-term, and opposition parties just don't seem to understand that. We're also the party which is prepared to invest in our economy, rather than just hope for the best."

Coun Dafydd Williams, cabinet member for finance, said: "I don't know any other council which could deliver the same services to the same standard as us with a 46 per cent Government funding cut since 2010." He accused the Conservatives and Liberal Democrats of "crocodile tears" by not speaking out against these reductions, with deputy council leader Coun Tracey Simpson-Laing saying opposition parties' plans were intended to "grab headlines and keep services in the dark ages", saying: "This city cannot survive like that."

Conservative leader Coun Chris Steward said Labour "wouldn't dare" increase council tax to a level requiring a referendum, in case residents rejected it. He said: "Councils spend other people's money, so it's absolutely vital we get value for money and it's time Labour started doing that - York is doing well despite, not because of, Labour."

Fellow Conservative councillor Paul Healey criticised Labour's spending on the Reinvigorate York city-centre revamp scheme, which the Tories wanted to reduce funding for. He said: "There is clear blue water between us on this - Labour say it's value for money, we would rather see funds go towards bins and street-cleaning.

"I don't know many tourists who come to York and talk about its really nice new squares, but I do hear them complaining about the litter in those squares and in the streets."

Coun Keith Aspden, who leads the Liberal Democrats, said: "The Government grant is there and we should take it, so money is in residents' pockets than a council pot.

"The choices Labour have made will see services decimated, wasteful spending run riot, borrowing increase and communities become disillusioned."

Coun Nigel Ayre, who proposed an amendment which the Lib Dems said gave a straight choice between freezing council tax or putting more money into the authority's reserves, said: "It's simple - help residents, or don't help them and put the money in a council bank account.

"The Labour cabinet seems to believe it knows better than anybody else in the city how money should be spent. I find that quite embarrassing."

The Greens proposed a budget requiring a 2.9 per cent council tax rise and a referendum, with leader Coun Andy D'Agorne saying a small tax increase would not compensate for funding cuts. He said: "A referendum would give Labour and all those who care about local services a chance to show their commitment to a compassionate, caring city and really campaign for these services, rather than the current focus on economic growth and expanding the city at any price.

"These changes represent the tip of an iceberg, but a vote to support them in a referendum would really mark this city as a unique, caring place and, at a stroke, empower citizens in the face of Government-imposed austerity."

York CVS chief executive Garry Jones told councillors the budget cuts being made now would "pale into insignificance" against anticipated Government funding reductions between 2016 and 2019. He said rival parties should "put politics aside and work as a strong and united coalition which stands up to Westminster." 

Heather Mackenzie of the Unison union said a "true commitment" must be made to keep services under council control, rather than outsourcing them, and that while social enterprises and mutual organisations were considered "soft privatisation", such schemes had failed elsewhere and increased costs. However, she said: "The biggest fight is to bring an end to austerity, as the Government is using the banking crisis as an excuse to demolish public services."