COUNTY councillors today warned that council tax will rocket and services will be cut back as they wrestle to keep finances under control.

And Lancashire County Council leader Hazel Harding has asked councillors to review their budgets in a bid to keep spending down.

The warning follows a lower-than-expected government settlement figure for the authority for next year.

Council officers had produced provisional estimates on how much they would need to continue existing services and develop new ones.

But after Lancashire County Council was given £875million from the Government to spend from April 2002, new plans have had to be drawn up.

The figure from the Government is some £6million less than expected, but five per cent up on last year's figure.

If councillors fail to find savings and insist on keeping to the provisional spending levels, the part of council tax handed over to the county could rise by 7.5per cent, to £855 for a Band D property.

Lancashire Police Authority and borough councils would then add their demands on top.

If councillors do keep to the new targets -- which includes shaving £4.4million from the predicted education spend, £4.5million from the predicted environment spend and £500,000 from social services -- then the county council portion of the tax will rise by 5.2 per cent.