RTTNews - Recession-hit councils in England face a GBP 4 billion deficit in income and may continue cutting jobs in the next twelve months, the Local Government Association said Tuesday.

Income from sales of land, council buildings and other capital projects dropped by GBP 2.7 billion since 2007/08. Interest earned on councils' cash deposits has fallen by GBP 1.3 billion due to low interest rates.

Town halls are feeling the effect of recession in exactly the same way as hard pressed homeowners and families, said Jeremy Beecham, Vice-Chairman of the LGA.

Low interest rates mean councils are much less able to rely on their savings, plummeting house and land prices have hit hard and income from leisure centers and a range of other services has fallen.

Almost 7,000 town hall jobs have gone in the last six months alone, the association said. As the effects of the recession continue to be felt, councils are expected to keep on cutting jobs over the course of the next twelve months.

The tough economic outlook is forcing councils to take a look at almost every aspect of their finances, Beecham said.

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