DUSTBIN wagons could be struck down by the millennium bug, causing rubbish to pile up on streets, councillors in Burnley have been warned.

There could also be hardship for thousands on housing and other benefits if Year 2000 microchip problems bite.

Failure to take speedy action could result in a disastrous situation, says a report to the council's policy committee.

It refutes the belief that the millennium bug is purely a computer problem.

"The reality is that it is not just about computers but basically any item containing an embedded or hidden microchip has enormous potential for system failure," says the report by information service section business analyst Jacqui Roberts.

"We have a responsibility under the duty of care to provide a healthy and safe environment to the public. Some of these areas, for example public cleansing, could be hit because refuse collection vehicles are now operating state of the art technology and could cease to function." A breakdown of the benefits computers could cause hardship for those most in need, councillors have been warned.

The report says significant steps have already been taken by the council to deal with the Year 2000 issue, with the formation of a project study group.

The report warns that the hidden costs of just checking if equipment is 'Year 2000 friendly' are considerable.

"To this end, unless realistic resource allocation is set quickly ,it is unlikely that the project can be completed effectively within the ever-decreasing time constraints," the report adds.

Last week councillors were warned that the town faced a nightmare scenario if its outdated computer system in the finance section is not replaced by next April.

They were told the computer, which was not Year 2000 compliant, was vital to day to day operations such as the payment of council tax and rents.

Upgrading systems would cost £44,570, with £7,150 annual costs.

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.