Cumbria County Council is also warning of "tough times ahead" for services such as care for the elderly, waste management and transport.

The authority said it had already made �12m worth of savings, but predicted a further �1m shortfall.

Finance boss Joan Stocker said some communities would "feel the pinch".

Ms Stocker, cabinet member responsible for finance, performance and resources, said: "Although we won't know the exact settlement for Cumbria County Council until December, the government has set its stall out for the next three years and there are tough times ahead.

'Increased pressure'

"We have been anticipating a real-term reduction in our grant and have already planned for a �1m shortfall.

"We are seeing big increases in the council's spending in areas such as the cost of waste disposal and caring for older people.

"There are also demands to maintain the county's roads and provide children's services outside school hours such as extended schools.

"The council has already achieved efficiencies of �21m and is reviewing its services to deliver them in an even more cost-effective way.

"But the outcome of the 2007 Comprehensive Spending Review means that an increased pressure is put on council taxpayers and we are having to budget for a 5% increase in council tax again next year.

"Make no bones about it, our budget is under pressure and Cumbrians will feel the pinch from this announcement."