Householders are facing a five per cent rise in Council Tax contributions to Caradon District Council. The increase will mean an extra charge of £7.77 a year for a Band D property and does not include contributions to other councils and the police, who have yet to set their rates. Councillors voted to approve the increase proposed by the Cabinet at a meeting of the full council on Tuesday. Members were told that an increase of £1 a year would generate an extra £30,600 for the council and a one per cent rise would be equivalent to £47,500. Cabinet member Kath Pascoe, a Callington ward councillor, said: 'Normally we have a really long discussion about how much we put the Council Tax up but this time the councillors realised that we had to do it because we are so short of money.' The Cabinet had recommended that the Caradon budget requirement for 2006/07 be £11,131,370 but this was increased to £11,140,370 after two creches in the area were given a reprieve (see above). In the current financial year Caradon District Council is facing a potential deficit of £328,000. At the end of last year Caradon District Council greeted the news that its proposed Government funding settlement will increase by £279,000 with cautious optimism. Caradon received a 4.8 per cent grant increase, the average national increase for district councils, which amounts to £279,000 in real money.   In addition to this, the Government has given Caradon around £520,000 earmarked for providing free local bus travel for the disabled and people aged over 60 from April next year. When the funding settlement was announced Councillor Hugh Francis, leader of Caradon District Council, said: 'This year's settlement is better than we were expecting, and it was helpful to be given an indication of next year's likely funding, which means that we can think longer term with our financial planning. 'However, the Government funding settlement to Caradon fails to keep pace with our rising costs, which means that we will still need to make significant savings this year and next year.' Despite the increase, Caradon is seeking to make savings of £2.35million over three years in a bid to balance its books and keep Council Tax down.  Caradon's overall Government funding settlement amounts to £6,118,000 – more than £1 million less than neighbouring North Cornwall District Council and more than £2million less than Restormel Borough Council. Last year 47 per cent of Caradon's net budget requirement was raised through Council Tax, with the rest coming from the central Government grant settlement.  At present Caradon receives 13p of every pound collected in Council Tax, with the rest going to the county council, town and parish councils and the police.