Falmouth Town Council’s plans to take over public toilets, fund CCTV provision, underwrite a local bus service and provide other vital services are in jeopardy after Government minister Eric Pickles threatened to cap local budget increases.

Councillors are waiting to hear whether Local Government Secretary, Mr Pickles goes ahead with a threat to insist any town or parish council wanting to increase its budget by more than two per cent hold a referendum and win the support of residents.

There are concerns, though, that any referendum would not permit councils to explain the reasons behind their proposed budget hikes, so not giving residents an informed choice.

Last month, Falmouth Town Council agreed a budget which equated to a 20 per cent rise or an increase of £27.40 a year on council tax for a Band D property. If permitted, this will be the first increase of the council’s budget in three years.

The hike has been made necessary by the council’s aspirations to take over services which, until now, had been funded by Cornwall Council.

Speaking at Monday’s meeting of the finance committee, chair Candy Atherton, said news of Mr Pickles’ plans had been met with “incredulity” but the final decision is unlikely to be made until mid-February.

“I was astonished that we find ourselves in the position where we are aspiring to take over public toilets, weed spraying, roundabout planting, CCTV, underwrite the buses and take over other services, and are facing this,” she said. “This will have a devastating effect. We are not talking about a level playing field here, it (the referendum) is designed for us to lose.

“I am very disappointed and it has taken the wind out of our sails. It is very hard to plan for something that might not happen in a few weeks’ time. As a town council we have come together and forged a good team wanting to revive the town and provide the services local people have asked us for. It is definite that next year he will cap us, so it’s this year or bust.”

Councillor Alan Jewel said: “It’s a disaster. We have to lobby our MP, otherwise it’s going to destroy all the aspirations we worked so hard to get.”

Councillor Oliver Cramp added: “What we have planned is the right way to go and we should stand firmly.”

The town council is to write to Mr Pickles explaining the reasons behind its proposed budget increase and asking him to back down from holding referendums. If he does still insist, members want his department to pay for it, which could cost £20,000.

Final words on the debate go to Councillor David Saunby who said: “I just call it dictatorship by Pickles,” while Councillor Grenville Chappel added: “We have been Pickled.”