FAMILIES are being warned 'the axe is still going to fall' on them despite the Chancellor's decision to scrap tax credit cuts.

Conservative George Osborne made the surprise announcement, along with a key pledge to protect the police budget, during last Wednesday's spending review.

He also pushed on with £12 billion cuts to the welfare budget as he continues his bid to 'eliminate' the deficit in public finances.

Tax credits are set to be phased out by 2018 to be replaced by the new universal credit and Cllr Russ Bowden (LAB – Birchwood), who is in charge of the council's budget, admits he fears for residents of the town.

"The Chancellor faced a rebellion from his own ranks over the planned cuts to tax credits," he said.

"However, he is still committing to £12 billion of unspecified welfare cuts promised at the General Election.

"Tax credits are being phased out anyway and will be replaced by universal credit.

"In reality, all we have got is a stay of execution - the axe is still going to fall on the same hard-working families, it will just be coming from a different direction."

He also claimed the Government was embroiled in a 'care funding crisis'.

"The council's budget pressure for social care is around £4 million," he added.

"A two per cent levy on our council tax would raise about £1.6 million and most would probably go into the pockets of private care providers.

"There is no sense in this proposal for councils like Warrington where the council tax base is low and where any percentage rise is not representative of the actual cost of care.

"All they are providing is a tiny sticking plaster and passing the problem on to councils and their residents."

Warrington North MP Helen Jones also believes the 'smoke and mirrors' review is set to leave working people worse off.

"The Chancellor's announcement on tax credits is not a full reversal – he has only scrapped £3.4 billion of the cuts next year which means working families will still see £1 billion of cuts to tax credits or universal credit," she said.

"The two child limit on child tax credit is still going ahead and the family element of tax credit is to be scrapped for new claimants.

"Women are also being hit three times harder than men by the Chancellor's changes to welfare spending and taxation.

"Of the £16 billion being raised in the current Parliament, £12 billion is coming directly from the pockets of women, including changes to universal credit, childcare support and child benefit."

There are also fresh fears the town's transformational project could be hit by Mr Osborne's announcements last week.

A council spokesman said: "We will be looking closely in coming weeks at the outcome of the Government's spending review to gauge what implications, if any, this has for the Waterfront project."

But Warrington South David Mowat has welcomed the announcement of a new fairer funding formula for schools, which will come into operation by 2017.

Under existing funding arrangements, schools in some areas can get up to £2,300 more per pupil than schools with roughly the same proportions of pupils from deprived backgrounds in other areas.

Warrington is one of the 20 worst funded local education authorities in the country and hundreds of teachers and head teachers in the borough have signed a petition calling for reform.

Mr Mowat, who has campaigned on the issue for five years, said: "I'm delighted that the Chancellor has listened to the hundreds of teachers, heads and parents in Warrington who have called for fairer funding.

"I wouldn't care if Warrington had less money than everyone else if I could take teachers through the formula and show them precisely why it produces the numbers that it does.

"The current system is arbitrary, unfair and it certainly won't be missed in Warrington."