THE city of Lancaster has received a surprise cash boost as part of its local government finance settlement.

The city council will be handed £12.789 million by the Government for 2005/2006 - that's a 4.4 per cent increase and more than it expected when councillors set the financial strategy.

They were anticipating an increase of 2.9 per cent - so the extra cash injection amounting to more than £350,000 means the city council should meet its financial target this year.

Council leader Cllr Ian Barker says: "This is a much better settlement than we anticipated when we set our medium term financial strategy. I am now confident that we can hit our target of keeping any increase in the city's share of council tax down to five per cent or less. If we achieve this it will be the lowest such figure for six years."

He goes on: "We plan to do more without imposing significant extra burdens on the local taxpayer. We are now looking beyond the next budget to 2006/07. Our aim is to find efficiency savings year on year so that we can sustain service improvements and keep tax rises down to low single figures for the foreseeable future."

But Geraldine Smith, MP for Morecambe and Lunesdale, sees things differently - she says the extra cash should be pumped into festivals in the area.

"I think it would be a sign of goodwill if the council re-instated the Light and Water and the Maritime festivals in view of the increase in funding," she told the Citizen.