COUNCIL chiefs were today studying a complex new spending formula which will decide next year's council tax levels.

The Government has announced the level of grant it will pay to councils. Any further spending will be made up largely from council tax.

City of York Council and Harrogate will get grant increases far below the national average - but Selby and Ryedale will fare better.

The changes are part of a process called "resource equalisation," which aims to redirect cash from wealthier councils to poorer ones.

York gets a 5.4 per cent increase, taking the amount of grant up by £5.183 million to £100.291 million. Nationally, the average rise is six per cent.

Harrogate Borough Council faces the lowest increase in the country - only three per cent.

The town's MP Phil Willis said: "The settlement will place huge burdens on the local authority, which will have to think about scaling back environmental projects and support for initiatives such as the Royal Hall."

An increase of 11.8 per cent was guardedly welcomed in Ryedale.

Councillor Alan Farnaby, leader of Ryedale District Council, said: "We have to look at this to work out what it means, but I am very pleased to think that we are going to be able to receive an above average rise."

North Yorkshire County Council will receive £15.745 million extra Government cash, taking the grant to £309.955 million, a 5.4 per cent rise. Extra money needed for county council spending is collected in council tax bills from district councils.

Updated: 12:00 Friday, December 06, 2002