COUNCILLORS today slammed the Government for under-funding, as Lancashire council tax rates look set to hit 7.96 per cent.

A meeting of Lancashire County Council's cabinet was told that rather than the 5.8 per cent predicted in the agenda papers released earlier this week, additional expenditure will mean it has to rise even higher -- to the equivelant of £858.51 for a Band D property.

Requests from teaching unions that their members' pay rises by 3.5 per cent and not the predicted three per cent, have pushed the budget up.

And councillors warned yesterday that Lancashire teachers may expect 3.9 per cent rise to bring them in line with other parts of the country.

This could push council tax up further, or could be passed to schools.

Tax will also rise because £300,000 is needed to access a predicted £3million from the North West Development Agency to fund projects hit by foot and mouth.

But the two rises which have annoyed councillors are the £500,000 needed to dispose of fridges, after the Government decided to classify them as 'hazardous material.'

The decision means they can't go to landfill sites and disposing of them separately is expected to cost extra and the cost of implementing the Government's e-government strategy -- designed to make councils use modern technology. It is expected to be an extra £1.4million.

Another cabinet meeting will be held in a fortnight to finalise budget proposals before it goes to the full council on February 14.

Coun Tony Martin, in charge of finance, said: "The problem lies with the fact we have had one of the lowest finance settlements from the Government.

"In fact, ours is the lowest for any shire county.

"We are now lobbying the Government for changes in the way the spending assessment is formulated so we can have a fairer deal in future."

"Things like e-government and the fridges problem is costing us money."

Coun Brian Johnson, in charge of regeneration, said: "The Government is under pressure to give us money for the fridges problem and, hopefully, they will give in."

Lib Dem leader David Whipp said: "The Labour Government are making themselves look good by keeping their taxes down while passing the cost on to us."

At a meeting last month, members of the cabinet were ordered to shave some £9.7million from their budgets overall to meet the targets set as a result of the lower-than-expected cash amount from the Government.

At yesterday's meeting, they were told just £3.4million had been found in savings -- with cabinet members adamant no more could be found.

Coun Martin added: "It has been a tough budget because we have been hit left, right and centre. We have tried to balance the services required against the amount people in Lancashire can afford to pay."

This year's council tax will be one of the highest in recent years.