Council Budget Supports Plans for the Future but Long-term Funding Remains Unclear

Posted by: Press team on 29 January 2020 10:33

South Tyneside Council is once again calling on the Government to be clear on how it will be funded in the future.

Since 2010 the Council has already had to save £168m due to reductions in the amount of funding it receives from Government. The Council needs to save a further £7m in 2020/21 and even more is expected in future years. The Government started its fair funding review in 2017/18 and councils across the country are yet to find out how they will be financed in the future.

Councils have become increasingly reliant on local tax revenues over the decade and the Institute for Fiscal Studies (IFS) has noted that the most deprived councils will be able to raise less revenue from increases in council tax than the least deprived councils. Those revenues don't look like they will keep pace with the rising costs of services like adult or children's social care which would mean finding billions more in funding to top up existing local tax revenues.

The council is calling on the government to ensure that future funding is fair and representative. Councils need long-term, sufficient and sustainable funding so they can deliver the best possible services.

Cllr Ed Malcolm, Lead Member for Resources and Innovation at South Tyneside Council said: "We are not asking for special treatment, just fairness.

"We've worked hard to keep all of our children's centres open, to invest in our leisure centres, to run the best events programme in the region and protect vital frontline services that our residents rely on.

"We are doing great things around infrastructure such as housing, transport, regeneration and jobs by being innovative and entrepreneurial. We make smart investments that deliver a return, but we are being held back by government cuts affecting our day to day spending.

"We took difficult decisions early on which has created some financial stability now. This has allowed us to protect frontline services as much as we can and invest in facilities for residents as well as creating the conditions to raise prosperity across the Borough. At the moment, however, austerity continues for councils like us."

The biggest reason why austerity is not over for local government is rising demand. An ageing population, increasing numbers of children in care and adults with complex needs requiring support are putting most councils' budgets under huge pressure.

The vast majority, some 70%, of South Tyneside Council's discretionary budget is spent on vulnerable adults and children.

As with last year, and like many other Councils across the country, South Tyneside Council is asking residents to pay a little more in their council tax in 20/21 to help protect services. The proposed increase is 3.95%, which is made up of a 1.95% council tax increase and a 2% adult social care levy - this equates to around 79p per week for Band A households, into which the majority of households fall.

The bill issued by the Council includes separate amounts levied by other statutory bodies such as police and fire.

Savings, and council tax increases, are being implemented due to the Government grant cuts which have been in place since 2010.

Cllr Ed Malcolm added: "The services that we provide reach out to everyone, we are the first port of call for many residents. It is vital that when people need help we are able to give it to them. Over the last decade that has become increasingly difficult.

"We continue to roll our sleeves up and get the job done. Providing for our residents the best we can with limited funding and resources."

If approved by Cabinet the Council's Medium Term Financial Plan will be presented to Borough Council at the end of February 2020.

Last modified: 01 April 2022 10:34