BURNLEY council's budget outlook is brighter thanks to the government's decision to relax the freeze on town hall spending, councillors were told.

The council feared it would have to save a further £4 million over the next four years if capping continued.

But this year Burnley is being allowed to raise spend £600,000 more and accountancy chief Nick Aves says under the Government's new direction a significant improvement in the council's budgetary position is likely.

But he warns there are problems on the horizon, with the loss of Government Challenge Fund cash and an increase in debt repayment demands. He says it is imperative the council does not lose sight of potential budget difficulties in future years.

His budget report, accepted by councillors this week, shows how a £750,000 cash windfall should be spent, helping avoid compulsory redundancies and secure continued services.

A £170,000 sum has been earmarked to avoid swingeing cuts in many Challenge Fund, community and better health projects.

A further £320,000 has been set aside for contingencies including costs associated with the planned transfer of Burnley's entire council housing stock to a publicly controlled local housing company.

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