PEOPLE in Durham will have to pay 3.5 per cent more for services provided by the city council.

The Labour-run council is expected to ratify the council tax rise, which is slightly-above inflation, on Monday after the Government confirmed it would provide £7m in grants.

People in Band A and Band D properties currently pay about £104 and £156 to the council. The increase would take their bills to £107 and £161 respectively.

But the final amount people will have to pay will not be known until Durham County Council - which could levy an increase of about nine per cent - Durham Police Authority and parish councils have finalised their spending plans.

The city council, which will have to subsidise the £14m Gala Theatre after the collapse of the firm it appointed to run it, will receive a 7.2 per cent increase in Government grants.

The council says it received the 'least favourable' grant settlement in the county. Authorities such as Derwentside and Chester-le-Street received 12.5 per cent increases, but cash sums awarded to individual councils ranged from £2.2m to £9.9m.

City council leader Maurice Crathorne said the council had made 'efficiency savings' that would not affect the level of services.

"Local people have made it very clear that they don't want to see huge tax rises. We have listened and delivered.

"It has been a very difficult exercise but we have managed to protect the services we offer while offering an acceptable council tax rise.''

Coun Crathorne echoed the call of many council leaders in the region for better funding, warning that services would suffer in future.

"If we do not receive reasonable support in the future, there may be a significant deterioration in our ability - and that of other councils - to meet the needs of council tax payers.''