TOWN hall leaders across East Lancashire were left reeling today by a Government finance settlement which they claim means council taxes could soar by 10 per cent.

County hall bosses say the Chancellor's annual local government settlement will force them to make cuts of £54 million in services across Lancashire.

And councils across East Lancashire have been ordered to freeze their spending levels at the same level as last year, except Ribble Valley Council which has been allowed a 0.4 per cent increase. The yearly Local Government Finance Settlement was announced yesterday and council finance chiefs have been working on the figures through the night.

Labour politicians are claiming council tax payers are being forced to foot the bill for the Government's cut in income tax.

Bill Taylor, Blackburn's chairman of management and finance, said local authorities across the country would have to find an extra £2 billion following the chancellor's tax cuts.

He repeated warnings that council tax rates in Blackburn and Darwen were likely to rise by more than 10 per cent next April. Councillor Taylor said: "The better off in society have done very well out of the budget and councils have been left to find the rest of the money.

"This was a pre-election Budget and the Government will have to go to the country next April or May.

"I think the people of the country will make up their own minds about the chancellor's Budget then."

George Slynn, the leader of Hyndburn Council, also lashed out at the Chancellor.

He said: "The effect in Hyndburn is that people will be paying more council tax for less services.

"This Budget was an attack on local councils and I would hope the response will be opposition from across the country.

"This is a pathetic settlement from a pathetic government which has run out of time.

"I hope this Government will be judged on its actions when it goes to the people next May."

Ribble Valley Council's Liberal Democrat leader Councillor Howel Jones said: "We have been given a minuscule increase in comparison with our total budget. It will not go anywhere near meeting inflation at three per cent.

"I regret the hand-out of an extra penny off income tax and certain other concessions in the Budget this week are being paid for by local government because council tax is bound to go up as a result." The majority of East Lancashire authorities have ben told to freeze spending but the county council has been given a 2.2 per cent increase in its budget.

Chris Cheetham, chairman of finance, said: "We are still looking at the figures but at his stage we estimate there will be council tax increases of around eight per cent.

"This also means we will have to make savings of about £54 million in services.

"The Government seems to think we can make cuts in social services which I find astonishing."

Councillor Cheetham added: "This was a politically motivated settlement. The whole situation is barmy.

"The Government is trying to take the credit for tax cuts while passing on the bill to councils."

Environment secretary John Gummer is claiming new arrangements will make more money available for councils to spend on regeneration projects.

He also added more cash had been made available for the police, the fire service and education.

In a statement to Parliament he said: "Local government accounts for a quarter of general Government spending.

"It would be absurd to imagine that within this large total total there is no room for greater efficiency, so I make no apology for the fact that we have pursued such inefficiencies vigorously.

"I can assure Parliament that we approach our assessment of what is needed to maintain key services with equal vigour."

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