THE leader of Derwentside District Council has branded this year's council spending allowance unveiled by the Government this week as a 'hammer blow' for the area.

The council will receive an increase in Government money of just under two per cent for the year 2002/ 2003.

Leader of the council Alex Watson said the authority now faced tough financial decisions in the coming year.

He said: "It is actually below the rate of inflation. We've had 11 years of hardly any increase from central Government and had three re-structurings of staff in that time to cut costs.

"At the minute we can only offer a minimum service which is not what we would like."

Mr Watson said it would be some time before the council would be able to calculate the impact on council tax levels.

Durham County Council, the biggest authority in the North-East, got the second lowest rise of any council - 1.7 per cent.