AN END to austerity may have been signalled by the Prime Minister, but Torfaen council's financial chief has warned the local authority is now entering its "most difficult period" in financial planning.

A shortfall of £25million has been forecast over the next four years for the county borough council in a "continuing difficult financial climate," a council report has said.

Outlining the council's financial plans, assistant chief executive of resources Nigel Aurelius told a cabinet meeting on Tuesday that difficult decisions will have to be made.

"This is going to seem odd but despite eight years of austerity I think we are now entering the most difficult period in terms of financial planning and the choices you as councillors need to make," he told the meeting.

"We've got significant pay inflation - we all support pay rises but it needs to come with the funding - and that doesn't look like it's going to be uniformly the case.

"There are not going to be many easy choices left, if any."

Demand in children's services is putting particular pressure on the council's financial position, the meeting heard.

The council's approach to tackling the shortfall includes considering "any scope" around council tax.

A council report says there will be no "real increased investment" in priority areas other than protection for schools.

"Clearly cabinet and the council will want to see investment but that has to be on the basis now of ‘save to invest,’ the report says.

"That is we need to be clear what any transformation or change is going to yield and its certainty of achievement before we can commit to investment.

"We can no longer do it the other way around because that will add too much financial risk for the authority to manage."

Deputy leader, Cllr Richard Clark, said the council was not alone in facing difficult financial decisions.

"There are some councils in Wales who face an even greater burden because they have not faced up to it sooner," he said.

Cllr Clark added that finding £25million of savings will 'undoubtedly' lead to "a reduction in services, a reduction in staff [and] greater pressure on those staff remaining taking up the burden."

"It is a serious task we have to do," he said.