COUNCIL taxpayers in Preston could face a five per cent hike on their council tax bill because of a "disappointing" grant from central government.

Preston will receive a below inflation increase of 2.5 per cent in its funding from the Revenue Support Grant for the next financial year, which is paid annually to councils from central government coffers.

And while Lancashire County Council is to get a 5.3 per cent increase in funding, Councillor Tony Martin, cabinet member for resources, said it is below the average of 5.9 for county councils.

He said: "We are disappointed, it is going to mean making tough decisions, but there's more than one way to skin a cat. I can guarantee that we will not increase our council tax by more than 3.5 per cent."

Coun John Collins, Preston City Council leader, said: "It is tremendously disappointing, it is worse than our worse case scenario.

"It does not seem that careful husbandry is being rewarded. I anticipate this will have knock-on effects for the setting of council tax, perhaps up to a five per cent raise."

However, leafy South Ribble, has been given an extra 5.7 per cent.

Council leader, Coun Howard Gore, said it reflected years of lobbying central government for more money. But he said it was too early to say if the extra cash would prevent a massive hike in tax.

Lancashire Police Authority received a rise of 4.3 per cent, which police chiefs claim is too low and may mean a shortfall in funding.

Baroness Ruth Henig, chairman of the authority, said: "We anticipate difficult decisions ahead.

"Right now we are consulting extensively on likely levels of council tax for policing next year."

Robert Wilkinson, chairman of Lancashire Fire Authority, said the 2.6 per cent increase in funding means there should be little change, and no cuts in the number of fire and rescue staff.