HOUSEHOLDS could be hit by five per cent council tax rises for the next two years unless the borough can save £820,000.

Though Hyndburn Council have frozen council tax this year for the second time, a financial report says it is ‘assumed’ rates will rise by five per cent in both 2012/13 and 2013/14.

Without the increase, hundreds of thousands in savings will be needed to make up for cuts in government grants.

However council chiefs claim that if the recession continues, alternatives will be looked at to avoid pressuring ‘hard pressed family budgets’. This year the borough will be rewarded by the governement for freezing tax with a grant that is the equivalent of a 2.5 per cent rise.

The financial report, to go before councillors next Tuesday, forecasts the borough’s finances for the next few years.

It says the increase would give £270,000 additional income in 2012/13 and 280,000 in 2013/14.

Without the raise the council would need to make savings of £270,000 the first year and 550,000 the next ‘due to the cumulative impact of not increasing year on year’.

The report, from leader Peter Britcliffe and prepared by the borough’s financial chief Joe McIntyre says: “These figures are however estimates at this stage. If the recession continues there will be pressure not to increase council tax to provide some relief to hard pressed family budgets.”

Hyndburn’s MP Graham Jones criticised the plans and cited the May council elections: “Freezing council tax this year and backing up costs for the next two is just an attempt to look good before an election.

“People need to know there is essentially a secret rise around the corner.”

Leader of the Council Peter Britcliffe said: “It is a forecast where we are preparing for the worst. We will be working in the meantime to make the savings needed and looking at the figures.”