BLACKBURN with Darwen, Burnley, Hyndburn, Ribble Valley and Pendle boroughs could be shortchanged by a government scheme supposed to boost their income.

Lancashire County Council could also lose out to the tune of £1million unless ministers amend the programme.

The five local authorities are taking part in a 'business rates retention pilot' which the government promised would provide them with more cash to spend on services.

It allows them to keep three-quarters of the money raised by the growth of local taxes on firms in the area rather than the current half of the total amount raised.

The extra cash is supposed to replace cuts in Whitehall grants to county hall and its borough equivalents with a cash bonus for taking part in the pilot scheme.

The five councils and Blackpool were promised they would share an extra £10.8m between them in the financial year 2019/20.

But now research for the Lancashire Telegraph by the BBC's local democracy service suggest the government's latest calculations for the scheme suggest they could all lose out.

While unitary Blackburn with Darwen provides all services in its borough, Lancashire County provides major functions such as transport, adult social care and children's services and education for Burnley, Hyndburn Ribble Valley and Pendle with their district council supplying the rest.

The research suggest Lancashire County could be the biggest loser getting £1m less than it expected to.

Its chief executive Angie Ridgwell said the authority was preparing to enter into 'a dialogue' with officials at the Department for Local Government.

She said: “Our position is that government needs to stick by the agreement as we all understood it when went into these pilots.”

Ken Hind, former leader of Ribble Valley Council which spearheaded the original talks on the scheme on behalf of the rest of the county's local authorities, said he was 'deeply disappointed'.

He said: “We should have been told about this at the time.

“This is something which none of the councils knew anything about and it begs the question as to how much of that extra £10.8m we will actually receive."

A Whitehall spokesperson said:  “Members of the pilot have queried our calculation of grant payments for 2019-20. We are currently examining the issue they have raised with us.”

Hyndburn Council leader Miles Parkinson said he expected any effects to be limited to the county council.

Spokesmen for Burnley and Pendle Councils said they were aware of the issue.   

Blackburn with Darwen Council did not respond to a request for comment.