THE Government delivered a financial slap in the face to the region's hard-pressed councils last night after ignoring pleas to bolster funding for vital services.

Hefty council tax increases are inevitable in County Durham and North Yorkshire after it was confirmed both county councils are to receive meagre Government grant increases for the coming financial year.

The prospect of Durham County Council having to increase council tax by up to 17.6 per cent looms large after the Government grant - or standard spending assessment (SSA) - rose by 1.9 per cent. That means the authority will only receive an extra £4,000 to push its budget to just over £390.2m.

And North Yorkshire County Council - the region's largest authority - fared even worse in the final round of settlements with a reported rise of just 0.9 per cent.

Last night, Local Government Minister Nick Raynsford said local authorities would receive a total of £47bn in SSA - an average increase of 7.5 per cent.

"This settlement will allow councils to improve services while setting reasonable council tax increases," he said.

But shadow local government secretary Theresa May accused Labour of "spinning the figures" and said many authorities would receive a settlement far below 7.5 per cent.

Officials and senior councils at Labour-run Durham have been lobbying ministers for a significant rise in SSA to avoid cuts in vital services.

Now they will be working on a council tax increase of between 12.5 and 17.6 per cent, allied to spending cuts, to overcome a £21m funding shortfall.

The council's deputy leader, Don Ross, said: "To offer us £4,000 is like saying to someone, here's five pence, get on with it.

"It won't do anything to help us keep services going in the direction we want them to."

Councillor Ross, who said 17.6 per cent would be the "worst case" increase, said the council would have to lobby to ensure that the funding formula was made fairer for North-East authorities.

Residents living in the lowest Band A homes - 66 per cent of the county's housing stock - will see the county council portion of the council tax bill, currently £480.60, rise by between £60 and £84.

John Weighell, leader of North Yorkshire County Council, said it had been consulting over a 10.25 per cent increase in council tax - which could yet fall below double figures.

Darlington Borough Council's final settlement figure, of £89.249m, confirms a four per cent SSA rise.

Council leader John Williams has already warned that the council tax will rise more than 9.5 per cent, or £50 for Band A homes. The alternative is the closure of such services as the Dolphin Centre or the Civic Theatre.

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