Newcastle residents are facing a 3% council tax rise as local authority bosses try to plug a £12m black hole – but there are warnings of even bigger cuts and widespread job losses still to come.
City councillors are set to approve savings proposals over the coming weeks that will also see charges hiked for things like parking, pest control and bulky and garden waste collections.
A proposed council tax rise from April would see bills go up by 2.949%, which amounts to £35.24 a year for a Band A property and £52.87 for a Band D, and 11 council jobs are set to go in 2022/23.
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But civic centre finance chiefs have issued a warning of yet more pain to come in future years, having already cut the council’s budget by £335m since 2010.
It was announced last November that Newcastle City Council would have to make £12m worth of cuts in each of the following three years – totalling £36m.
However, the situation is now even more dire than first feared, with the withdrawal of a Government grant meaning that total deficit is now £41m.
And it has emerged that the majority of the cuts needed between 2023 and 2025 have not yet been identified – with a new council report predicting this will require “significant reviews of our services and ways of working” with “job losses across our directorates”.
Council leader Nick Forbes said that there is “very little left for the core services we continue to deliver to those most in need in our city” and warned of “more pain to come in the years ahead”.
The Labour leader, whose political future hangs in the balance after being deselected in his Arthur’s Hill ward last week, added: “When we published our draft plans for consultation, we anticipated that we need to cut £12m a year for the next three years – this has now increased to £41m over the three years, with £18m now needed in the second year.
“This is on top of the £335m we have had to save since 2010 – equivalent to a loss of £2,454 per household.
“Councils all around the country continue to be forced to make severe cuts this year to balance their books. When allocating funding, the Government expects councils to increase council tax and apply their adult social care precept, so we are left, yet again, with very little room to tackle the financial challenges ahead.
“Sadly, our call to Government to stop the squeeze on household budgets by ruling out unfair Council Tax rises has fallen on deaf ears. I know that many people in the city are facing a growing cost of living crisis, but the Government has left us with no option.”
The council said that the extra budget pressure had been caused by a Government Services Grant being revealed to be a one-off boost rather than a permanent fixture, as had originally been assumed.
Of the £18m worth of savings that will have to be found in 2023/24, only £7.4m has been identified so far – and only £2.9m of the £12m needed in 2024/25.
An extra £400,000 awarded to the council in its annual settlement from the Government this year will be used to increase funding to Metro operator Nexus, in order to help mitigate the impact of major upcoming cuts to public transport.
This year’s £12m worth of cuts will be found by means including:
- Price increases to services including pest control, street services, composting and bulky waste collections, garden waste collections, and parking charges;
- Leasing out another floor of the civic centre to outside organisations;
- Cutting the number of pool cars available to staff and councillors;
- Reducing the number of children in the council’s care and the number of childcare placements outside the city that the local authority pays for;
- Cutting adult social care spending by nearly £4.5m by remodelling the council’s services, including by trying to prevent or delay people going into long-term care and delivering new supported housing that “promotes independence in communities” for people with learning disabilities and or autism;
- Reducing waste disposal costs by increasing recycling rates.
The budget proposals are due to be discussed by the local authority’s cabinet next week, before being signed off at a full council meeting on March 2.
