RATEPAYERS in north Durham will be paying more than the rate of inflation when their council tax is set today.

A meeting of Derwentside District Council will see members agree an increase of 4.6 per cent - well above the 2.9 per cent rate of inflation.

Bills for the majority of Derwentside residents, who live in Band A houses, will rise by £29 a year to £654.13.

The authority is blaming the continued financial squeeze put on them by central government for yet another hefty rise in the council tax bill.

Last year, bills rose by 4.4 per cent, despite plans to expand council services throughout the financial year being shelved.

The bill increase comes just three weeks after the council announced the axing of 23 jobs, including those of two directors, in a £300,000 restructuring.

Council leader Councillor Alex Watson said: "I think our council tax bills are very competitive with the rest of country.

"This year, we only had a Government grant of £146,000, so we needed to find another £334,000 saving just to take care of the inflation alone - that has to be reflected in the bill.

"Also, our budget is kept so low - this year it is £11.55m compared to £12.78m ten years ago. Therefore, we have never yet had a standard spending assessment that did not lead to an increase in the council tax."

Councillor Bill Stockdale, independent Derwentside member, said that, once again, some groups in society were more vulnerable than others.

He said: "By and large, I tend to think people on fixed incomes, and pensioners who are tied by inflation are more likely to be hit.

"Also, I find the most disappointing thing is that the prime job of any district council is to find employment for people, particularly young people. With this council tax, it looks like the means for supporting new industry are not there."

The new council tax bills for each band are: Disabled A £545.11, Band A £654.13, Band B £763.16, Band C £872.18, Band D £981.20, Band E £1,199.24, Band F £1,417.29, Band G £1,635.33, and Band H £1,962.40