THE first indications of whether Darlington residents can expect another large council tax increase next year will emerge next week.

The borough council will receive its annual settlement figure from the Government, which is a key factor in determining the level of council tax .

During the coming months the council will calculate next year's bills - following a 12.5 per cent increase in the average bill for the 2001/2 financial year. That amount came despite budget cuts of £1.2m and was the highest in the North-East and Yorkshire and Humberside region.

The council argued that, although it was a sizeable increase, the tax level was still among the region's lowest.

Budget discussions are expected to take place between now and Christmas with the council tax figure due to be announced in early 2002.

Next week's news will follow a meeting of the borough's resources scrutiny committee this afternoon when councillors will receive a half-yearly report. It will tell of a projected overspend of £921,000 by the year-end, including £68,000 in education, £598,000 in social services and £187,000 in the development and environmental department.

A council spokesman said this would be unlikely to have a great effect on the tax figures because such an amount accounts for less than one per cent of the authority's overall budget.

Council leader John Williams justified last year's rise on "increased demands for services" and said its tax level was the lowest in the region, and the ninth lowest average out of 354 authorities in the country.

Conservative group leader Tony Richmond said much of pensioners' increased state benefits were swallowed up by the council tax rise and said: "This state of affairs cannot go on."