And residents could be asked to take part in a referendum on whether to increase Council Tax to avoid cuts in services. Last week, HDC announced it has to wipe an extra £3.2million from its budget by 2018\/19, on top of its plan to save £2.6m by 2017\/18. In a statement, it blamed cuts in funding from Central Government and changes to New Homes Bonus payouts the money HDC receives for every new home built in the district, more of which will now go to the Local Enterprise Partnership. Council leader Councillor Jason Ablewhite said there were stark choices ahead, while fellow Tory Councillor Jonathan Gray, executive member for resources, warned of difficult decisions. Both stressed the council would continue to provide a good service. But a report by Steve Couper, HDCs assistant director of finance and resources, revealed the harsh reality of the decisions the council faces. Under the heading Increased uncertainty major extra savings required, he expresses the need for urgency in identifying cuts or raising income. Mr Couper warns it will be an extremely challenging task for officers and members to achieve. He continued: No organisation can ever say that no further efficiency improvements can be found but members will be aware of the significant savings that have been achieved in previous years which, when coupled with the existing savings plan, will dramatically reduce any significant further opportunities. Existing proposals include wiping £70,000 a year from the street cleaning budget, sharing services such as IT and CCTV, and scrapping the arts development spend (£11,000 a year). Other options being considered include joining forces with other local authorities to provide services such as pest control and teaming up with Cambridge City Council for environmental health. HDC managing director Joanne Lancaster is involved in helping members maintain funding for services with the highest priorities. Once a plan has been drawn up, Mr Couper says councillors will have to decide whether to hold a referendum on increasing Council Tax as an alternative to the cuts. Such a move, he warns, would be a high risk strategy due to the costs involved and the effect of delaying implementing cuts if there was not support for raising Council Tax. The amount rates could rise is unknown and could be subject to limits from Government. HDC is likely to have to take an extra £258,000 from its reserves to cover an overspend in 2013\/14 but by 2015\/16 the coffers will be at minimum levels, said Mr Couper, who added ...and so there is no alternative but to urgently identify options for savings thay can be introduced in time - this will be a major challenge.