COUNCIL bosses are to go ahead with a £26m leisure centre despite a £6.8m hole in their budget.

Hartlepool's budget shortfall is the equivalent of a 13 per cent rise in council tax.

One suggested solution for tackling the defecit would see a council tax rise, capped at 4.9 per cent, and cuts to services and jobs totalling £4.1m.

Some of the services being considered for closure include the Foggy Fuze library, the Bridge Youth Centre or the Eldon Grove Leisure Centre.

Hartlepool Mayor Stuart Drummond has defended the decision to continue with the building of a new leisure centre.

He said: "Over the past few years, we have been putting money away because we know the Mill House leisure centre is coming to the end of its life and the maintenance costs will be too high.

"And the majority of the money for the new leisure centre will come from different sources, such as Government and lottery grants."

Redundancies for 22 care workers in the children's services department and two management posts in adult and community services are also being considered.

The council will receive a 2.6 per cent grant increase for 2006 to 2007, making a total of £41.8m. With increases of £900,000 in the cost of caring for the elderly, £200,000 in rising energy costs, and financing a £500,000 concessionary travel for the elderly scheme, officers say the increase is not enough.

Council bosses are also considering appealing against their funding allocation from the Government before the final grants are fixed at the end of next month.

Further talks will go ahead on Monday, but a full decision is not expected until February.