November 22, 2000 11:26: HERTFORDSHIRE is in danger of losing £7 million of Government cash if proposed changes to local government financing are enforced.

Hertfordshire County Council currently receives a grant, known as an Area Cost Adjustment, because of the high cost of living in the county. This is adjusted according to price increases in the area.

It is designed to cover the higher costs paid by councils for services, wages and goods in expensive areas of the country, such as Hertfordshire.

But the Government is reviewing this grant and may freeze it so that will no longer rise in line with local inflation.

Hertfordshire County Council leader Councillor Robert Ellis said: "This is a very serious threat.

"But, fortunately, we have the support of Hertfordshire's MP's of all parties, working with us to lobby the Government and explain the impact this could have on our residents, and we are grateful to them.

"This £7 million is nearly one per cent of our budget and when you think of it in terms of £4 million for schools and £3 million on social services, you realise how much is at stake.

"The Government is reaching a decision at the end of November. I hope that our representations and those of the MPs will help them to see the fairness of our case."

Councillor Ellis' battle to get the cash allocated to Hertfordshire is backed by the leader of the county council's Labour group, Councillor Bob Mays, although he believes Hertfordshire can expect extra money from the Government next year anyway.

He said: "We are lobbying MP's and, of course, we want the county to get this money.

"But the government is planning to give the county a grant of £17 million next year, which will pay for services to be maintained and for an extra £5 million for education.

"So we will get by next year and we will be able to improve services in line with what the Government wants. But I would not like to say we don't need this money - we do want it and we are fighting for it."

Watford MP Claire Ward voiced her concern at the proposed changes.

She said: "There is a principle here and that is, costs are higher in Hertfordshire and the south east than other parts of the country and so we should get more money.

"I have already written to the minister about these proposals to explain my concern about any changes proposed for the Area Cost Adjustment.

"There may be more grants available from the Government but the principle is at stake that this area is more expensive to live in and therefore the county council does need more cash."

Dave Allen