South Kesteven District Council leaders have approved a £5 increase in council tax – the highest amount possible - for band D properties.

Under the government's rules, councils can apply a rise of 2.99% or £5 to council tax, depending which is higher.

The proposed rise will bring in an extra £256,000 to the council. The council also hopes to make £600,000 of savings and £200,000 extra through fees and charges.

The authority's cabinet approved the budget on Tuesday before council members vote on the move on Tuesday.

In a report before members, officers said the council would also need to use around half of a £3 million "budget stabilisation reserve".

Council leaders were told that "significant financial external events" outside of the council's control were having a "detrimental impact" on the council's financial outlook".

They include escalating inflation, energy prices and employee pay.

Deputy council leader Cllr Adam Stokes said: "These unforeseen and unavoidable pressures have seriously impacted the assumptions that underpin the medium term financial plan."

A "short-term" solution to utilise £1.534m of its £2.904m Budget Stabilisation Reserve to balance the books was also approved.

"This can and must only be a one off event and I know my cabinet colleagues are focused on reviewing financial plans to ensure a sustainable outlook without further reliance on reserves," said Councillor Stokes.

The proposals have been through both scrutiny and cabinet as well as going out to consultation.

Out of 264 respondents to the consultation, 61% disagreed with the maximum rise.

Leader Kelham Cooke said the authority was in a "more financially secure place than many other local authorities across our country".

However, he warned: "Challenging decisions are going to have to be taken particularly over the next year in terms of how we run our services, how they operate, but also how we can improve and get the best value for money in terms of everything we do as an organisation.