CITY Council staff will be cut by around a fifth over the next five years as severe budget cuts and reform of public services take effect.

The Argus can reveal a total of 540 jobs will be cut from Brighton and Hove City Council by 2020 with 260 jobs to go in the next financial year alone.

Hundreds more will be transferred from the council into newly formed trusts and other providers in the voluntary and private sectors.

Unions warned the job cuts represented a “fundamental decimation” of council services with hits to children's and adults services, vulnerable adults, refuse and recycling, street cleaning and parks maintenance

The job cuts to be formally announced later today come a day after George Osborne claimed councils would retain their existing spending power in five years time.

Mr Osborne said new income in retaining business rates revenue by 2020 and new powers to retain all proceeds from council property sales would balance out lost central government grants.

The chancellor also announced councils will have powers to increase council tax by an additional two per cent specifically to pay for adult social care from next year.

The rise would cost a band B council taxpayer about £30 a year.

Council leader Warren Morgan said he would not rule out the potential future council tax rise but said the additional £2 million would not plug the funding gap and would mean taxpayers, not the Government, were being asked to find more to fund public services.

Local authority leaders had been fearing further cuts of up to 40 per cent to their central government funding in yesterday’s announcement, which did not materialise.

Brighton and Hove City Council still has to make cuts of £68 million by 2020, bringing total savings since 2011 to £145 million.

Next year's budget cuts of £25 million represent more than a tenth of the council’s £220 million net revenue budget.

Coun Morgan said: “The biggest part of any organisation’s cost is staffing and when you are faced with cuts of 30 per cent or more then job losses are inevitable.

“A ten per cent cut in staffing when you are looking at a 20 to 30 per cent cut overall shows we are doing well in not passing on the entire cuts to our staff.

“We will do everything we can to maintain the service in the face of 40 per cent cuts in funding from Government.

"There's no doubt people will feel an impact on services, you can't take 30 per cent out of a budget without that having an impact on the frontline.”

GMB branch secretary Mark Turner said: “These changes are massive, it is going to have a major affect on service delivery.

“Anyone who thinks the council can carry on business as usual will be sorely mistaken, it will mean reduced service for children, adults, vulnerable adults, refuse and recycling not being collected, street cleaning and parks maintenance reduced.

“The moral among public staff is already very, very low but it’s going to hit rock bottom.”

Unison branch secretary Alex Knutsen said: “This is where people need to wake up and smell the coffee, this is a fundamental decimation of parts of the service people receive from the council.

“Some of these services are falling apart as we speak.”