HYNDBURN Council has run into a cash crisis that could mean council tax soaring and services being cut.
Revealing the shock news at a meeting yesterday afternoon, the council's Tory leader Peter Britcliffe said they faced stark choices and belts would have to be tightened.
He announced to the Executive Board that the authority might have to find up to £1.8M savings to avoid going into the red.
He warned the situation was "very serious'' but vowed to do everything in his power to protect council tax payers.
Councillor Britcliffe, whose party returned to power in May, said the council would be looking at a number of cost-cutting exercises, such as reviewing purchase plans, selling assets and assessing whether staff vacancies needed filling.
He added that Hyndburn - like all other local authorities - would be facing a council tax rise next year anyway, due to insufficient Government funding, increased insurance premiums due to the risk of terrorism and reduced income from rents and charges.
He added: "We will undoubtedly need to take some very tough decisions, not just for this year but for the year ahead too, because of inadequate support the Government has given us.
"We want to minimise the impact on services we deliver to the public. Some measures we can put into immediate effect and others will need to be considered.
"Our main priority will be to minimise the impact of this on local council taxpayers. It is not a situation we could have anticipated, nor is it one to which there are any easy solutions.
"We will, however, work with our staff and senior managers to deal with the problem immediately. We will get through. We are a council with a future."
Councillor Britcliffe claimed the problem started during last year's Labour administration.
He said: "In particular it appears the former Works Department, which provides services such as refuse collection and building maintenance, was operating at a loss of around £537,000.
"Luckily the council received a one-off rates rebate that more or less cancelled out the overspending, leaving us with a deficit of around £86,000.
"The problem is when the Labour group went on to set the budget for this financial year it was not aware of this financial black hole." But Labour seems sure to hit back at the allegations after studying Councillor Britcliffe's statement.