REDCAR and Cleveland Council was set to approve a 4.9pc increase in council tax at a meeting yesterday.

The increase will allow for £10.4m in extra spending.

The overall £177m budget will see the council increase its education budget by £4.3m, and includes more money to help finance the new equal pay agreements for its workforce.

It also achieved £2.2m of savings after an intensive analysis of spending across all departments, and is confident it can elevate its official status from "good" to "excellent" with continuing improvements in services, efficiency and investment.

Cabinet member for corporate resources, Coun Glyn Nightingale, said: "Today's budget reflects this is a period of major change for the authority, and an increase of 4.9pc on council tax is necessary to finance these improvements.

"All these improvements will dovetail into the council's key priority areas, outlined in its community plan. In order to make a significant contribution towards pushing forward with the plan, an extra £4.4m is being invested.

"This includes extra money for creating more employment opportunities, tackling community safety and crime, recycling and helping older people."

He added: "Local residents can rest assured we have not finished the business of reshaping the way the council operates.

"The quest for better ways of giving value for money and shifting the council's resources to putting services to local people first will continue."

Coun Nightingale said the council was spending an extra £1.5m to take over several costly, but essential, schemes because of a lack of or end of Government funding.

He said: "Several changes forced on the council by Government have pushed up council tax this year. Government funding has not matched the national average."

An information leaflet, detailing how the budget has been created and what it means to the borough's 62,000 council taxpayers, will be delivered with the new council tax bills from Monday.

The new council tax bands, including police and fire precepts, with last year's figure, in brackets, are: Band A: £841.48 (£802.16), Band B: £981.73 (£935.86), Band C: £1,121.97 (£1,069.55), Band D: £1.262.23 (£1,203.25), Band E: £1,542.72 (£1,470.64), Band F: £1,823.22 (£1,738.02), Band G: £2,103.71 (£2,005.41), Band H: £2,524.45 (£2,406.48).

Hambleton District Council has announced an increase of 5.3pc, taking a Band D property from £1,107.13 to £1,166.03.

Stockton Borough Council has agreed to increase its council tax levels by 3.9pc. A Band D property will now pay £1,011. 99, compared to £974.66 last year.

The figures for Stockton do not include the separate police and fire brigade elements of the tax, known as precepts.

Cleveland Police Authority has set its budget for the year at just under £115m, which will mean a 5pc increase in its precept to local authorities.

Chairman Ted Cox said: "This demonstrates the enormous progress we have made in creating firm financial foundations, at the same time as maintaining our commitment to front-line services."