BURNLEY could opt for a council tax increase of 6.5 per cent this year - more than three times the rate of inflation - even though there is cash in the kitty to keep rates down.

Finance chiefs have been working on a budget allowing for a 4.5 per cent rise in the council's own share of the total rate bill - the lion's share of the final demand coming from Lancashire County Council.

But a report to tonight's meeting of the finance committee says consideration could be given to a 6.5 per cent hike - giving the council an extra £74,000 in the kitty to spend on "growth items".

The report from finance director Nick Aves states: "There appears to be little risk of Government intervention at this level and reflects the fact that the County Council imposed an increase above guideline for the current year and are very likely to do so again next year."

The report suggests the cash could be used for improvements such as appointing an anti social behaviour officer at £31,000 and an urban regeneration programme officer, costing £35,000.

Mr Aves says further discussions are still taking place and there will be more meetings before final proposals are presented to the policy committee at the end of the month.

The report shows there will be more in the council's bank balances than expected at the March 31 financial year end.

The authority will be able to keep the necessary £1 million in balances, keep its own council tax charge down to a 4.5 per cent rise and still have £446,000 in hand to finance improvements in the town.

These include an extra £308,000 for better refuse collection and street cleaning, already announced, £41,000 for restructuring the problem-plagued housing benefit service and £25,000 more on improving audit services.

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