FAREHAM residents look set to receive below-inflation rises in their council tax again this year.

Members of Fareham Borough Council's ruling executive last night agreed to recommend an increase of just below three per cent to their colleagues.

If the rate is accepted by full council, it would mean the annual payment for an average Band D property will go up by £3.96 to £140.49.

That will be added to charges by the county council and Hamp-shire's police and fire services to make up the total bill.

Fareham's 2.98 per cent rise is in line with the council's aim to keep council tax increases below the retail price index measure of inflation, which in November stood at 3.2 per cent.

Council leader Sean Woodward said he was pleased the council would be able to keep its pledge to limit rises. He said: "We want to be able to propose a council tax increase that will be well below inflation at three per cent, despite one of the meanest settlements from the Government we have ever had."

But the low rise could ultimately mean cuts have to be made.

In their report to the executive, the council's finance officers warn that the next three-year period is expected to be the toughest financially that the council has faced in many years.

Fees and charges are set to rise by five per cent, but expenditure levels could be rev-iewed once the Government support is set for 2008-9.