9 October 2012 Last updated at 14:22 ET

Wakefield Council fears more cuts after rates changes

Further cuts will have to be made following changes to the way business rates are collected, Wakefield Council has claimed.

The local authority said it would need to save a further £12m on top of the £41m earmarked over the next two years.

The council said it was too early to know whether savings would affect front line services and jobs.

The government has said the changes will encourage councils to boost local business growth.

'Front line services'

Currently rates are calculated and collected by local authorities and put into a central pool before being redistributed according to a complex formula.

From April 2013, councils will be able to keep a portion of the money they raise from business rates collected from shops, offices, pubs and factories.

Some areas fear that the localisation of business rates could leave them worse off because they lack a large economic base.

Council leader Peter Box said the change was "unreasonable" and would leave the council with a shortfall.

A spokesman for the Department for Communities and Local Government said the reform was an oppurtunity for councils to raise more revenue and give them more financial freedom.

In March Wakefield Council agreed to make savings of £22m over the year.

As a result of the budget reduction, several savings were introduced including the closure of two nurseries and a re-organisation of the library service.