SERVICE cuts could be on the way as town hall bosses try to avoid imposing a double-digit rise in council tax.

Despite a late funding boost from the Government, leaders say they need to find £2.7 million to balance the budget.

They are also putting pressure on police chiefs to slash the amount they charge Bury for their services: the police authority wants to hike its precept by 16 per cent.

Latest figures show that the council will have a shortfall of £2 million, plus £700,000 to cover police costs. Extra cash announced by the Government cash comes to £1.8 million, but this will be wiped out if the council "passports" the full amount to social services.

Councillor Wayne Campbell, executive member for resource, said that if Bury simply charged the £2.7 million to council tax payers, it would increase bills by ten per cent: double the "guideline" figure that Bury had been working on, in line with Government thinking.

Mr Mike Owen, director of finance and e-government, told members that the council needed £10 million, nearly half of that in social services, to pay for planned service improvements and meet new legal responsibilities. While Bury had fared relatively well this year in the Government's funding deal, it was not enough to cover costs.

He said the council would have to consider making budget cuts, possibly borrowing more, or taking money from reserves.

Coun John Byrne, council leader, said that while council had been working on a council tax rise of five per cent, circumstances could blow the budget off course.

He added: "We thought we had an agreement with the police last year that their rise would be around inflation: a 16 per cent rise would give us considerable difficulties."