North Tyneside Council’s Cabinet agreed a package of budget proposals on Monday evening (Feb 1) following a public consultation.
The council continues to operate in a very difficult financial climate and the pandemic has added ‘significant risk and uncertainty’ to the budget setting process through additional costs, lost income, and undeliverable savings.
The proposals aim to ensure that savings can be delivered, protect services and tackle inequalities while the council continues to drive forward its ambitious regeneration plans for the whole borough and support the local economy to recover and grow.
The council faces a projected cash shortfall of £6.3m in the coming financial year – which could rise to £42m over the next four years – and has already had to save £127m since 2011 due to reductions in its Government grant.
The Government assumption is that the council will plug the funding gap by raising council tax 1.99%, together with a 3% increase in the Adult Social Care Precept to help fund the care of the elderly and vulnerable.
Council tax discounts will continue to be available for some of the hardest hit residents and the Cabinet also wants to set aside £600,000 to extend the Poverty Intervention Fund into 2021/2022. The fund was set up as part of last year’s budget to support children, families and older people who may be struggling, and has been a vital lifeline for many people.
Like all councils, North Tyneside has reserves which are held for specific purposes; related to contracts and particular services such as housing. The relatively small amount of usable reserves is used to cope with one-off costs and cannot support the cost of services year on year. The current level of reserves is quite low for an organisation of such size and complexity and in light of the financial risks and uncertainty the council must address now and in the medium term.
Proposals have been developed in the face of continued uncertainty over future Government funding. Key reforms to local government funding - including the Fair Funding Review, Business Rates Retention, and reform of adult social care funding - have been pushed back making longer term financial planning for the authority very difficult.
The council must also consider the longer term financial impacts of the pandemic for residents and businesses, and this could be seen beyond 2021/22. Some central government funding is expected to be received for the first quarter of 2021/22 to support the impact of Covid.
The council will continue to drive down costs and deliver efficiencies in the coming year by reviewing the way goods and services are commissioned; improving services and enabling people to do more online through the digital strategy; investing in buildings and facilities to reduce ongoing costs and improve their efficiency; and making sure staff have the skills and training they require to serve the people of North Tyneside now and in the future.
North Tyneside’s Elected Mayor, Norma Redfearn CBE, said: “When last year’s budget was agreed in February 2020, nobody could have predicted the financial impact the pandemic would have both nationally and locally just 12 months on.
“The long-term economic impact is still unknown, and we have incurred significant losses which the Government support has not entirely covered. The funding gap in the coming year must be filled and the government have made it clear that they expect us to raise council tax to continue to fund our services.
“We know that our communities are facing many difficulties in light of Covid and we hope there are brighter days ahead. Although it has been incredibly difficult to set a budget while facing so much risk and uncertainty, we see this as a fair and flexible budget that will help us manage the current pressures and continue to plan for the future so that North Tyneside comes back even stronger once the pandemic ends.
“We remain committed to making significant investments in all parts of our borough through things like our Ambition for North Tyneside plan and our commitment to tackle climate change and reduce our carbon footprint.
“We will continue to support our businesses and invest in homes and jobs so that North Tyneside remains a great place to live, work and visit.
“Despite the unknowns, our residents can be sure that the authority will protect and improve the services that meet their needs and provide good value for money, while also supporting our most vulnerable residents, tackling inequalities, and helping the economy to recover and grow.
“It won’t be easy, but we have a strong record of delivering on local people’s priorities within the resources that are available, and we will be there to support our residents and businesses every step of the way on the road to recovery and towards an exciting new future for North Tyneside.”
As part of its commitment to be a listening council, the proposals were developed after a consultation exercise which ran from December to January.
Engagement first took place during the Big Community Conversation last summer, when 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 three years.
The final budget proposals will be presented to the full Council at its meeting on February 18.
