BOLTON residents could be facing a five per cent hike in Council Tax over the next year despite an announcement that the council is set to receive an extra £20m.

The predictions, contained in a report to council finance chiefs, also suggest that individual departments will still have to tighten their budgets because the extra cash has been ear-marked for specific projects.

The council is likely to get an increase of around £13.4m in the amount the Government considers it needs to spend, plus extra resources of more than £10m specifically aimed at improving service provision in schools and social services and boosting urban regeneration.

Bolton's actual budget for next year will depend on how much grant the council receives from the Government but states residents will face the Council Tax increase to fall in line with Government forecasts.

The report also suggests that individual council departments will still need to find extra resources to fund future projects and identify a further one per cent saving.

Council leader Cllr Bob Howarth emphasised that the picture was still very fluid.

"Really the figures in the report are precautionary estimates which have been raised early to help departments plan their budgets," he said. "We could be looking at a standstill budget with some departments having to contain their own growth items but we are also looking at redirections to help give us flexibility to respond.

"There is an extra one per cent that these departments may have to find but if we get the settlement we expect it should not be necessary.

"Education is due to receive an extra £7.7 million from the Government but £4 million is for inflation so there is scope to develop the service further by about £3 million. We are also looking at improvements in social services and urban regeneration."

He added: "If our forecasts are correct the special grants will be a big help in initiating a number of improvements and those will go ahead whatever the final settlement because it will be specific money for specific schemes, but we are going to have to look carefully, as usual at other aspects of the budget."