THOUSANDS of people on benefits in East Lancashire face paying at least £200 more in council tax when a controversial Whitehall scheme comes into operation.

Town hall bosses have been told by the Government they must abolish the current system of council tax benefits and replace it with a scheme for which they will get 10 per cent less funding.

The new rules come into force in 2013 and could leave some households paying between £200 and £300 more each year.

In Blackburn with Darwen 18,240 claims, in Burnley there are 11,690, Pendle 10,290, Hyndburn 9,780 and Rossendale 6,740.

Blackburn MP Jack Straw said: “It is just further evidence of how the government has made the system biased in favour of better-off areas.”

Liberal Democrat, Labour and Conservative councillors in Burnley have united to condemn the tax hike.

Burnley has one of the highest proportions in the county.

LibDem council leader Coun Charlie Briggs is set to lobby Communities Secretary Eric Pickles over the issue, with the help of Burnley MP Gordon Birtwistle.

“These proposals will create an additional financial problem for the council, transfer financial risk and budgets cuts from central to local government and impact on some of our most vulnerable citizens,” said Coun Briggs.

He described the benefit policy as ‘ill-thought through’ and urged Mr Pickles to ‘drop it like a stone’.

Labour’s Coun Mark Townsend said the cost of introducing the 10 per cent cut would fall on the people who currently receive the benefit.

The average claim nationally is around £15.81 per week but it is believed to be slightly higher in the Burnley area.

Currently, more than 5.8 million people claim council tax benefit in the country, more than any other means-tested benefit.

Over half of claimants are pensioners.

Coun Townsend said families could be left facing a 25 per cent reduction in council tax benefit.

He added: “Families in this town are facing council tax bills which are hundreds of pounds more than they currently pay.

"This proposal is an absolute disgrace.”

And Conservative group leader Coun Peter Doyle said he had no hesitation in echoing his rivals’ calls.

He feared that the introduction of the system would only lead to more council tax defaulters - and end up costing the authority even more in increased prosecutions.

Coun Doyle said: “I support reductions in benefits but this policy just will not work.”

Announcing the scheme in Parliament, Mr Pickles said: “It will create stronger incentives for councils to get people back into work and so support the positive work incentives that will be introduced through the Government’s plans on universal credit."

Councils in hard-hit East Lancashire are also awaiting the impact of further Government plans allowing authorities to retain part of the business rates they collect.

In a report for the Smith Institute on local government finance, it is acknowledged that city boroughs like Westminster and Camden in London would find it much easier to raise rates revenue than areas like East Lancashire.