Council tax in Greenwich is to be hiked up as the authority looks to establish a new anti-knife crime unit, deal with the impact of Universal Credit and balance stretched budgets.

Greenwich Council’s financial plans have been published ahead of a formal sign-off at a meeting later this month.

According to the draft budget, council tax will be upped by 2.99 per cent – the most it can be without a referendum.

Meanwhile, the council is planning a one-off influx of £1.2m to set up a serious youth violence team to combat the borough’s escalating gang problem, and to provide support for users of Universal Credit and train people back to work.

Departments will be tasked with finding £2.25m in “efficiency savings” following warnings from the council leader the authority is stretched to the limit.

Cllr Dan Thorpe told residents struggling on Universal Credit yesterday: “We’re trying to do what we can to look after people, but it is proving almost impossible now.

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“We have to set our budget this year – under current projections we are something like £14m overspent.

“There are so many pressures in terms of children’s and adult social care. We’ve had to try and find a lot of one-off resources – we had originally set aside £2m to help with anti-poverty for work we are doing around the Fairness Commission, but we’ve had to put that money in to plug the budget.”

According to the draft budget – set to be heard by Cllr Thorpe and his cabinet at a meeting next Wednesday – a council tax increase is needed to deliver services under pressure.

The report explains: “A large element of the overspend pressure relates to needs led statutory duties including supporting the most vulnerable i.e. social care and homelessness.

“Additionally, sustained pressures arising from statutory duties relating to services such as waste and environmental health.

“This picture will provide a challenge in the future to services which are designed to promote choice, control and user resilience.”

The total council tax – including the Greater London Authority’s chunk – would be £1,489.55 for a band D home.

The council says £1,400 in government funding has been cut per household -since 2010 – more than the average across the country.

The report claims “changes to the Local Government Funding regime have resulted in recent years in significant turbulence”.

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Looking to the years ahead, officers say a change in how funding is distributed by the government – focusing on population and rurality – would have a big impact on budgets for waste disposal, libraries and homelessness.

Opposition Conservative leader Matt Hartley said the council was still refusing to “get real” on wasteful spending – such as shelling out £1.3m on its fortnightly freesheet Greenwich Info.

He said: “After years of attacking our repeated calls to reduce back office costs, Labour councillors have finally admitted that £2.25 million in waste and inefficiency can be saved without impacting frontline services.

“This is an extraordinary U-turn and shows just how much local taxpayers’ money they have been wasting all these years, despite the financial pressures on the council.

“Even now, however, Labour councillors are refusing to get real on big items of wasteful spending like the £1.3m contracts they just signed for their pointless fortnightly magazine.”