CITIZEN Smith would be entitled to his cynicism over council tax if the facts supported his argument - they do not.

A 'mega-increase' in council tax was on the cards if we had followed the spending plans of the MBI.

You do not have to take my word for it, you can look at Independent Group proposals tabled at last year's budget meeting, showing a 20.5 per cent increase in council tax in 2004/5 followed by 13.2 per cent in 2005/6.

Unfortunately, even that isn't the whole story. City Contract Services, which is responsible for services like street cleansing, waste collection and building maintenance and which used to make a profit, turned in a big loss in 2002/03.

Also, the cost of the planned expansion of the doorstep recycling scheme was severely underestimated. When these costs are added, the council tax increase - if the City Council did nothing about it - would amount to 28.4 per cent.

Contrary to Citizen Smith's cynical but ill-informed assumptions, the Labour, Liberal Democrat and Green coalition has not accepted these MBI spending plans but has set about reducing them. The council tax figure for next year is nine per cent and for 2005/6 it is now 7.9 per cent.

When compounded, that amounts to a massive reduction over two years of 29.6 per cent in the council tax projections of the MBI. We intend making further reductions.

So why were the Independent Group putting forward such huge projected increases? Put simply, they financed a series of spending commitments from one-off grants and windfalls. Neither the windfalls nor the grants were likely to recur in 2004/05 but the spending commitments would remain. It was a policy of fiscal Micawberism - hoping something would turn up. Well it didn't and the coalition cabinet has been left to pick up the pieces.

The budget that will be presented to Council on February 11 will be set in the context of a Medium Term Financial Strategy which will reduce substantially the in-built council tax rises inherited from the MBI and have a capital programme that can be sustained into the future without excessive borrowing.

Cllr Ian Barker, Leader, Lancaster City Council.