YORK Racecourse has emerged as an unlikely saviour for one city council department as it struggles with budget problems.

As leisure and heritage chiefs at City of York Council unveiled their budget plans for the next financial year, they revealed the directorate's income could significantly increase - thanks to a ten-year review of rental income for Micklegate Stray.

Race events at Knavesmire have proved such a success in the last decade that there is likely to be a 65 per cent increase in the racecourse's annual rent bill from £213,000 to £353,000.

Coun Keith Orrell, pictured, leisure and heritage chief, said that would give the department an extra £50,000 this year, with £140,000 in subsequent years.

"This is based on ten per cent of the gate, members and car park income from the racecourse, and will help ease the directorate's budget pressures," he said. "It is a significant chunk. We see the racecourse as a partner, and the partnership we developed for Royal Ascot was tremendous."

James Brennan, marketing manager at York Racecourse, said: "The situation is that this is being reviewed and there is constructive dialogue ongoing about that. Different figures are bandied about and we wouldn't comment on individual figures."

The department will have an overall budget of £10.6 million for 2006/07, but has been forced to make £300,000 of savings. It is thought three full-time jobs will be lost - two in youth and one in library services.

Revaluation of rates for Waterworld, Edmund Wilson and Yearsley Swimming Pools have brought £50,000 of savings, the rent for allotments is likely to be increased by five per cent above inflation for the next three years (the current average rent is £37 a year) and the events and festivals budget will be cut by £2,000. A further £29,000 will be saved by reducing the library service's business information service.

Coun Orrell said: "The extra funding for our priority areas - parks and youth activities - has been maintained in the 2006/07 budget, to ensure we can build upon the progress of the last two years.

"As we are now seeing 50 per cent more people taking part in the holiday schemes, we want to further increase this success. The cuts which must be made in order to deliver a balanced budget within our poor grant settlement are very difficult and disappointing.

"The Liberal Democrats will be continuing to urge the Government to provide proper funding for the city but, until that happens, we have no choice but to reduce our commitments."

The proposals will come before the council's executive on February 17.

Updated: 09:11 Saturday, January 07, 2006