Dismay after 'unfair' grants under Government rulings

Councils across the North-East will receive, on average, a 4.3 per cent increase from the Local Government Finance Settlement for 2004/5 compared to a national average increase of 4.7 per cent.

The Association of North-East Councils said this was the lowest increase in the country for what was the poorest region of England.

It said it would continue to press the case for more resources based on need and deprivation factors, rather than population.

Regions Minister Nick Raynsford said the "generous settlement" - the seventh above-inflation increase in a row - meant large council tax rises was not acceptable.

He acknowledged, however, that the region's relatively poor deal was due to a continuing exodus of people from the North-East.

Last night, Bob Gibson, chairman of the Association of North-East Councils, said: "We simply cannot accept the fairness of a settlement which awards the poorest region in the country with the lowest increase in resources.

"The level of funding proposed for the North-East will not enable us to meet the region's needs or help to narrow the ever-widening gap between the North-East and the rest of the country.

"There is an urgent need to undertake a comprehensive assessment of the grant distribution across all local authorities and key services.

"We will be responding to Government with a robust case which will identify all of the key issues for the North-East from a regional perspective."

At a meeting of the association's executive, members also voiced concern that district councils had lost out dramatically, with some only receiving about a 2.2 per cent rise.

Durham County Council, which is likely to receive about 5.7 per cent extra, has said it was "no better or worse than anticipated".

A spokeswoman said the council was looking at the details of the grant before making a decision on the budget for the coming year.