A TOWN council will throw more money into its reserves because of fears over the "current economic uncertainty".

Lyme Regis Town Council aims to have £1 million in its reserves by 2018, but will hold the council tax charge for residents next year, despite worries over future funding cuts.

The council's strategy and finance committee agreed its budget for 2017/18 last week, subject to the approval of the full council. The authority also agreed to hold the council tax precept at £120,708 - despite the council tax support grant from West Dorset District Council being phased out by 2019 .

Cllr John Broom suggested whether the authority should consider increasing the precept, after speaking to members of other authorities, who raised fears over future funding cuts.

Cllr Stan Williams was worried that with West Dorset District Council possibly disappearing in the restructuring of local government, the town council could be left in a difficult position - as negotiations continue over assets in the town.

He said: "I do think we need to be careful.

"We cannot be too optimistic. We are talking about doing deals with the district council when there is not going to be a district council."

But town clerk John Wright said it would be "very hard to justify increasing the precept" for residents, when the authority is making a "significant surplus" and has reserves of £725,000, which is estimated to rise to £977,000 by March next year.

In a report to councillors, finance officer Keith Wilson, said: "Good practice recommends town councils hold between 25 per cent and 100 per cent of their income in reserves at any given time. This town council's policy is to hold at least 50 per cent of its income in reserves.

"Given the current economic uncertainty, the potential devolution of services from principal local authorities and future capital projects, officers propose the reserve for 2017/18 is £1 million."

Mayor of Lyme Regis, Cllr Owen Lovell told the committee there are other ways of finding additional finance if it is needed, including the £120,000 of grants handed out by the authority.

He added: "I honestly can't see anything that would cause me any concern about holding the precept at this time."

Staffing costs are expected to rise from £445,000 during 2015/16 to £507,000 next financial year, while income received from car parks is expected to soar from £563,00 this year to £652,000.

The council has budgeted to spend £35,000 on Marine Parade railings, £44,000 on ICT, £6,000 of tackling seagull problems and £28,000 on CCTV in 2016/17.

Cllr Brian Larcombe said: "Lyme is very unusual with the kind of income it has.

"We could have looked at a reduction in precept. I think keeping it still this year would be right."