OXFORDSHIRE County Council faces a £2.8m ‘green tax’ bill if it does not improve its environmental credentials.

The authority – which is laying off staff and cutting services ahead of cuts in Government funding – has to buy ‘credits’ to make up for its carbon footprint as part of the Carbon Reduction Commitment Energy Efficiency Scheme.

These are £12 a tonne now but the council fears it will face a huge bill when they rise to £50 in 2013, raising the prospect of further service cuts.

The number of allowances available will be reduced that year, and the price will rise, making it cheaper for businesses to reduce the amount of carbon dioxide they produce than to buy allowances, to encourage them to improve energy-efficiency.

A county council report says the authority would face a bill of £2.8m as a result of these changes, based on its environmental performance last year.

And it faces further penalties when private and public bodies are placed in a league table next year as part of the scheme .

A poor ranking could mean it has to pay £1.4m of penalties by 2015.

It has put in place an improvement plan and predicts it will cut its carbon footprint by three per cent each year.

Even if it can achieve those cuts, its 2013 bill would only be reduced to £2.6m.

However, the authority hopes this would propel it up the league table and lead to some of the money being returned.

The council’s cabinet member for infrastructure, Ian Hudspeth, said the green tax had to be taken seriously, given the mounting financial constraints faced by County Hall.

He said: “There are going to be some very tough decisions in coming months but we have to take into consideration the long-term impact.

“If we don’t get it right, it might mean funding for other services isn’t available.”

But he added that if energy use was cut it was a win-win situation, as it would lead to lower fuel and tax bills.

Green councillor Larry Sanders said the authority should do more to improve its “pretty mediocre” environmental record. He added: “The county could do more. They have been told they need to do something by us and they have been very slow.”

He said that the Government should also offer more incentives rather than fines, such as grants to insulate buildings.

For more information about the carbon reduction scheme, see oxfordshire.gov.uk/crcsos