A WORKING group, which will include five members of the Executive and five of the Overview and Scrutiny, will be set up to resolve Pendle Council's problems in balancing future years' General Fund budgets.

The decision to establish such a group, which will meet in public, was made after the Executive were asked to indicate what advance action should be taken in preparation for the forthcoming budget round.

A report to this month's meeting indicated that budgets were set to rise by 10 per cent -- and that would mean a hike of around 20 per cent in Pendle' borough's share of tax demands next April.

Savings made last year and other reserves could be used to ease the situation and keep Pendle's rise down to the 3-5per cent marks.

But they add that this would not address the fundamental problem that Pendle was spending more than it could afford, a situation set to worsen in future years unless action was taken.

Managers have invited members to be precise on which areas they wish to target for budget cuts.

The report says that even without money set aside for improvements in service, projected spending for next year stands at £13.1million, a 10.5per cent increase, mainly resulting from the non-availability of bail-out cash from the bank -- £423,000 was used this year --and inflation at £430,000.

Any issues raised by the group will be reported back to the October meeting of the Executive.