Council leaders confirmed that Bury's over-65s will have a council tax "rebate" of two per cent, as predicted here last week.

Town hall bosses approved a budget which means the tax will rise by 4.9 per cent for most people in the borough, but by just 2.9 per cent for 5,000 pensioners who are not on council tax benefit.

The 4.9 per cent rise will increase a Band D bill by around £60 to £1,288, while the bill for a Band A house will rise by £40 to £859. (see table). The bills include a 4.99 per cent increase for the police, and 3.5 per cent for the fire service.

Bury is only the second council in the country to use new powers to give certain groups of people a council tax break. The move will benefit 5,000 householders, out of a total of 80,000 in the borough, and cost the council £150,000.

To claim, over-65s can fill in a form at the local library or council office, call 0161 253 5095, or via the website www.bury.gov.uk Deputy council leader Mike Connolly told last week's meeting that the council had listened to older people's complaints about the regressive nature of the council tax. "This is a genuine recognition of the plight that some older people find themselves in."

But Coun Peter Redstone, the Tories' finance spokesman, said that Labour were treating the borough with contempt. "Why are we raising taxes, cutting services, and selling off our assets to the highest bidder?" he asked.

The Conservatives, however, chose to abstain on the budget rather than vote against it. The Liberal Democrats voted with Labour.

The budget makes savings of £6 million, leading to around 20 job losses. Councillors rejected the more controversial items on the cuts shortlists, such as closing an old folks' home, shutting Ramsbottom Civic Hall, and collecting the recycling bins only once a month.

The council's capital programme for major building works is £43 million next year. This includes £8.5 million for the new Radcliffe Riverside school, £12.7 million on housing, £3.8 million of highways works, and £12.8 million for schools.