Residents will soon be invited to have their say after North Tyneside Council’s Cabinet agreed their initial budget proposals for 2021/2022.
Amid significant uncertainty around the pandemic and future funding, the proposals aim to support North Tyneside’s economic recovery, maintain and improve services, and drive forward the council’s ambitions in the coming year.
Throughout the pandemic, the council has provided local leadership and taken action to maintain vital services for residents and businesses, support the NHS and wider health system, protect vulnerable people and ensure the safety of staff.
As of September, the cost of Covid-19 to North Tyneside is estimated at £27.3m, including additional costs of £20.6m and £13.2m in lost income, and estimated savings of £6.5m. Government grants have covered £21.4m and left a shortfall of £5.8m.
A report to Cabinet highlights the scale of the challenge and says many of the additional costs, lost income, and undeliverable savings will have an extended impact on the 2021/2022 budget.
The council’s Medium-Term Financial Plan, approved by Members in February 2020, indicates a gap of £8.256m in the coming year and around £44m over a four-year period. The updated financial plan indicates a gap of £6.370m for the coming year and around £56m over the next four years. This figure is in advance of any increases to Council Tax rates.
The report sets out an indication of the funds available through a general increase in council tax of 1.99% and a 2% adult social care precept. but government guidance on this announced last week as part of the Spending Review proposed an adult social care precept of 3%
The Chancellor’s announcement confirmed the delay in key reforms to local government funding, including the Fair Funding Review, Business Rates Retention and reform of adult social care funding. These continued delays make longer term financial planning for the authority very difficult.
North Tyneside’s Elected Mayor, Norma Redfearn CBE, says the authority will use all its experience of financial management during a decade of austerity to set a budget that reflects the priorities of residents and businesses.
She said: “This has been an incredibly difficult year and we know that many of our residents and businesses have suffered greatly as a result of the pandemic.
“Council finances have also taken a significant hit as our spending has increased and our income has reduced, while the support from central Government has not covered all of our additional financial pressures, and demand has increased for services such as adult social care.
“We don’t know what the long-term economic impacts of the pandemic will be but, despite this unprecedented level of risk and uncertainty, we will continue to plan for the future, listening and focusing on the priorities of residents and businesses to
come up with a fair and balanced budget for 2021/2022.
“Despite the unknowns, our residents and businesses can be sure that the authority will continue to deliver and improve the services that meet their needs and provide good value for money, while also supporting our most vulnerable residents, helping the economy to recover and to grow and achieve our environmental targets as well.
“It won’t be easy, but we have a strong record of delivering on local people’s priorities within the funding resources that are available, and this will stand us in good stead as we prepare to face the ongoing challenge posed by Covid-19.”
As part of its commitment to be a listening council, the proposals will be developed after further consultation with residents and businesses to establish their priorities and deliver the best outcomes for the borough.
Engagement took place during the Big Community Conversation this summer. The activity was limited due to the restrictions, but the council was able to gather views through the Residents’ Panel about what the priorities should be to support the borough’s post-Covid recovery.
The budget setting is guided by the priorities in the Our North Tyneside Plan 2020-2024, which sets out the council’s ambitions for the next four years.
Further engagement on the Our North Tyneside Plan 2020-2024 and budget proposals will take place during December in line with the engagement strategy, before the proposals come back to Cabinet in February 2021.