FEARS have been raised that Durham County Council could suffer under the Government's funding regime.

The council, which provides services such as education and social services, received the second lowest increase of its standard spending assessment (SSA) of any shire county for the current financial year.

The SSA is the Government's view of what a council should spend. Durham's rise of 3.1 per cent was 1.7 per cent below that given to county councils in more affluent parts of the county.

This was despite the claim of former Local Government Minister Hilary Armstrong, MP for North-West Durham, that it was a generous settlement.

The Labour-run council decided to use £2m from its reserves to maintain spending, rather than make up the difference with a bigger rise in council tax or through cuts.

Councillors had hoped a Government review of the complex formulae used to calculate SSAs could lead to changes that would benefit the county.

County treasurer John Kirkby told the authority's executive committee that the review would not lead to any alterations in the next financial year.

"We know in overall terms what the resources available to local government as a whole ought to be. What we never know at this time of the year is the share the county council will achieve. We have to wait until November or December to know our SSA."

The council's former deputy leader Bob Pendlebury said the council would have had difficulties if it had not used reserve money. He warned the council might struggle to find money for its priorities.