South Norfolk Council is set to shave half a percent off its proposed council tax increase after members agreed to a reduction in their allowances.

South Norfolk Council is set to shave half a percent off its proposed council tax increase after members agreed to a reduction in their allowances.

Residents had been facing a 2.9pc rise in their district council precept after local authority budgets were squeezed by the credit crunch.

But members of South Norfolk Council's cabinet gave their approval to a 2.48pc council tax increase on Monday after identifying further savings.

It comes after members and officers went back to the drawing board to find reductions in the local authority's agency staffing and job advertising budgets. The councillors' allowances budget has also been cut from �276,000 to �267,000 a year.

The recommendation, which was due to be discussed by South Norfolk's full council last night , will result in residents of Band D homes paying �130.68 a year in the 2009/10 financial year. The rise amounts to just under 6p a week.

Council Leader John Fuller said: 'Last year we froze council tax. This year, we've had to make big economies to keep the rise below inflation. To help us get there, councillors are taking a share of the pain in the form of a reduction in their allowances.'

'No stone was left unturned to keep council tax as low as possible while maintaining a businesslike approach and living within our means.'

Mr Fuller added that the district council had still managed to protect investment in vital capital projects by ensuring grants remained available. Car parking charges are not being increased, and an arts festival will go ahead this summer to boost local tourism, he said.

Further efficiency savings were approved on Monday after cabinet agreed to a senior management restructure at South Norfolk, which could save around �300,000.