A MASSIVE council tax hike and cuts in services could be on the cards in Hyndburn, after auditors found a massive hole in its finances which could make it bankrupt.

Council leader Peter Britcliffe held an emergency meeting yesterday to tell councillors they needed to make £1.8million savings by the end of the year after spending too much money.

The cash crisis could result in an overspend equivalent to more than 16 per cent of the council's £11million budget.

Both parties have pledged to work together to resolve the cash crisis, which came to light in September, by setting up a joint working group.

The news means cuts in services and possibly a whopping 10 per cent increase in council tax.

Coun Britcliffe said if the council had not received a half a million pound windfall rebate from overpaid rates on amenities it would have finished the last year nearly £600,000 in debt.

"If we carry on spending the way we are we would be overspent by £1.8million by the end of the year," said Coun Britcliffe.

"We will do everything we can to keep Hyndburn's council tax increase as low as possible. I think we could be looking in the region of 10 per cent, but we will be working as hard as we can to come in with a lower figure.

"We will definitely save the council from going bankrupt and take whatever actions are necessary to prevent that and alleviate the situation for council tax payers.

Vacancies at the council could be one area to be hit, but opposition leader Jean Battle said there would be no redundancies.

"We are going to work together on this because it's a major problem for the council," she said.

"We have outside accountants coming in and internal accountants and nobody picked it up.

"We only go on the advice from the officers.

"At the end of every financial year they write off the accounts when the auditor has been in.

"I think the responsibility ultimately lies with the officers in charge.

"We have had financial reports coming back every cabinet meeting.

"Nothing showed a deficit until September when we got the final accounts through from the external auditor.

"It's looking grim at the present time but I'm sure the council can resolve the issue and find the money from other places.

"I don't think it will mean redundancies because there are other options.