Victorian councils have blamed the State Government for having to sack staff and cut services.

But the State Government has struck back.

The City of Wangaratta Council claims that various part of local government spending had to be reviewed due to funding cuts.

It says the cuts come as a result of rate-capping, which will come into effect on July 1, 2016.

Minister for Local Government, Natalie Hutchins, says local councils should not use the Labor Government’s ‘fair go rate cap’ as an excuse to cut staff and services.

But the councils say it is just one issue impacting their financial planning.

The pausing of indexation of financial assistance grants (FAGs), a funding cut in the Country Roads and Bridges scheme, and new responsibility for roadside weeds and pests are dwindling local coffers as well.

The Local Government Minister is expected to impose a cap on council rate rises across Victoria at the rate of inflation, which forecast to be 2.6 per cent.

Ms Hutchins warned in a recent statement that councils should “get back to basics”.

“Councils need to put a stop to over-the-top executive pay rises and needless waste,” Ms Hutchins said.