THE government has been lashed for depriving East Lancashire councils of much-needed cash.

Hyndburn Mp Greg Pope and Burnley's Peter Pike have attacked the government grant system.

The Labour MPs claim their local authorities are losing out because of rigged grant systems and restrictive red tape.

Mr Pope told environment minister Sir Paul Beresford that if every council received the same government grant support as Tory Westminster, most would be paying out money to council tax payers instead collecting it.

He said: "If Hyndburn Council received the same support as Westminster, it would be able to pay a rebate of £612 for every council tax payer in the borough.

"Do you understand the anger that this corrupt system causes?"

Sir Paul told him that to finance such a step would put 14 pence in the pound on income tax and told him to examine Hyndburn Council spending. Mr Pike complained about the red tape involved in the government's Capital Challenge Scheme where individual local authorities have to bid for finance for major projects.

He told environment minister of state David Curry: "Do you recognise that council leaders everywhere are worried about the time taken in preparing bids for all those challenge type schemes? They are fed up with the fact that no extra money is made available for them, they are fed up with the rules continually changing, and they are fed up with those schemes not dealing with the urgent priorities of expenditure that exist in many parts of the country."

Branding Mr Pike old Labour, Mr Curry said local authority leaders always objected to new schemes but then often changed their minds.

He said: "There is new money - the money we bring in from the private sector. That is what is so good about the challenge programme."

"It adds private sector money to public sector money. Many Labour local authority leaders throughout the country will benefit from it."

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.