COUNCILLORS were today being recommended to approve a Hyndburn council tax increase of almost 10 per cent in a budget of over £12million.

In addition, councillors were being encouraged to support an urgent move to lease two plots of land at a Great Harwood industrial estate for 999 years as bid to deal with a £1.8million financial black hole.

The issues were among a number of financial recommendations being considered by the cabinet and a joint meeting of all the authority's overview and scrutiny committees.

Council leader Coun Peter Britcliffe recommended in the agenda a report by chief financial officerJoe McIntyre. Its proposals included a budget of £12,614,878, a list of savings, a borough council tax increase of 9.91per cent, plus monitoring and accountability plans.

The proposed budget would be a 6.1per cent increase on the previous year's. Combined council tax bills for borough and county services would rise by 5.8per cent.

If agreed, the proposed total council tax bills would be £847 for a Band A home, £987 Band B, £1,128 Band C, £1,269 Band D, £1,551 for Band E, £1,833 Band F, £2,154 Band G and £2,538 Band H.

Last year council tax bills in Hyndburn rose by 9.2 per cent, a move that was criticised by Peter Britcliffe, who was then opposition leader.

This year's agenda stated: "Budget preparations have been delayed due to the need for the council to address the major issue of a large potential overspend on its 2003/4 budget."

Finance bosses in Hyndburn have been trying to fill a £1.8million hole in their budget. The council has already put some of its capital assets up for sale to try and re-coup losses.

The former Brook Bond Oxo mill, at Premier Mill, Great Harwood, which it owns in partnership with Barnfield Construction, could raise £700,000. Council workers were also asked to cut their hours in a bid to reduce the debt.

The cabinet and scrutiny committees were also due to hear a report on an executive decision to sell plots 2 and 3 at Alan Ramsbottom Way, by way of a 999 year lease.

Councils were warned by government that increases above five per cent would not be tolerated. The Office of the Deputy Prime Minister said it would cap large raises and warning letters have been sent to councils planning large increases.

The ODPM has refused to reveal which authorities it has sent letters to and it is not clear if Hyndburn was included.