PENSIONERS and others in York most likely to be hard hit by large council tax rises could in future be offered "discounts".

New legislation expected to be passed this week would allow local authorities to offer council tax discounts to those citizens it decided most needed them.

Coun Steve Galloway, the leader of City of York Council, said he was "very interested" in the idea.

Speaking as it emerged the council faced a budget black hole of up to £8.4 million, and so may have to raise council tax by up to 15 per cent next year, he said: "Our greatest anxiety in terms of council tax is that it is too hard on particular sections of the community."

Pensioners had suffered in the past because their income had not kept up with salaries. But it may also be possible to find ways of offering discounts to other groups, he said - such as those on low wages who earned just too much to qualify for council tax benefit. If such groups could be protected, he added, it might be possible to raise council taxes higher than would otherwise have been the case.

The idea was welcomed by Sally Hutchinson, chief officer of Age Concern, York, which campaigns on behalf of older people.

Pensioners had been hard-hit in the last few years by swingeing council tax rises which are far in excess of tiny increases in their pension. "I think that the older people's assembly would welcome the chance to talk to him (Coun Galloway) about an opportunity to ensure they got a fair deal," she said.

Meanwhile, Coun Galloway said today it was unlikely the Government would use "capping" powers to control City of York Council's finances. He said: "York has one of the lowest council tax rates in the country."

Council finance chiefs are to prepare a detailed report into the city council's pension crisis - and £30 million could be released. York councillors last night agreed that more information was needed on a possible solution to the £77 million pension black hole. Options include releasing the £30 million lump sum from council balances, or increasing contributions in coming budgets.

Updated: 10:48 Tuesday, September 16, 2003