TOWN hall bosses are to hike up Bury's council tax by an inflation-busting seven per cent.

The rise, proposed by Bury's ruling Labour cabinet, is even higher than forecast and above the likely national average.

And in a double whammy, council house tenants face a rent rise of 5.8 per cent, more than last year's rise which triggered a backbench rebellion in Labour's ranks.

If approved, the increase means that the local authority will have put up the council tax by nearly 35 per cent in the last five years.

Householders in a Band A property would see their bills rise almost £40 to £607.26. People living in a Band D home, for example, would pay £60 more, or £910.89.

Councillor Derek Boden, council leader, conceded that the rise would not go down well.

He partly blamed the Government for giving more cash to London and the South at the expense of councils like Bury, a switch which had cost the borough £1 million. Also, the council had to find extra money to fund a higher than expected pay rise for teachers. Despite making departmental cuts, there was still a shortfall in the budget, and members were determined to keep as much as possible in emergency reserves.

"It would not be sensible to keep balances at the bare minimum, because we would have hit the buffers next year. We may have been looking for drastic cuts.

"Obviously, the rise will be unpopular, but it's in the long-term interests of people who use services in Bury."

Coun Boden said that the council was not proposing any harmful cuts in services, unlike previous years when those had accompanied high tax rises.

But he said the current way of funding local government was "creaking at the seams" and needed a major overhaul.

Meanwhile, the council house rent rise of 5.79 per cent means tenants will be paying an extra £2.50 a week on an average rent of £45.68.

Bosses say this will raise an extra £1,138,700, vital to help fund £62 million of repairs and investment over the next five years.

Councillor Kevin Scarlett, housing chairman, said the rent increase was imposed in line with Government guidelines, and tenants would ultimately benefit.

"It's good in the sense that we can now start to plan long-term investment in housing," he said. "It's bad, in that it's 5.79 per cent.

"I am sure that some people will be disappointed, but will recognise that we have to do this and we have no choice."

The council tax and rent rises have to be approved by the executive committee on Wednesday (Feb 28) and by full council on March 7.