Frontline services in Gateshead could be hit with “urgent” cuts as council bosses weigh up drastic action in a bid to avoid financial ruin.
It was revealed on Tuesday that two of the town’s leisure centres are facing closure after being deemed “unaffordable”. But the economic crisis hitting local authorities across the country could soon see more public services being scaled back imminently.
Councillors heard this week that Gateshead Council is currently expecting to overspend its budget by £6.5m this year – and faces a colossal shortfall of £55m over the following five, even when taking into account plans to spend more than £45m of its cash reserves to combat the huge deficit. Tuesday’s cabinet meeting was told that the local authority was in the midst of an “unprecedented” situation caused by spiralling inflation, a national economic crisis and rocketing demand for social care services.
Read More: Two leisure centres in Gateshead at risk of closure after being deemed 'unaffordable'
Council leader Martin Gannon said the civic centre had already been “hollowed out” by budget cuts amounting to £179m a year and the predicament had been made worse by the Covid pandemic and “incompetence in Government”, adding: “The scale of what we are facing is absolutely catastrophic.”
The Labour chief warned that there was an “absolutely urgent necessity to get control” of the situation and that service cuts in the current financial year would be needed to balance the council’s books. Coun Gannon said: “I don’t know what those will be. Some of them may be unpalatable and things that we cannot face doing.”
He added: “It is similar to what we faced during Covid-19, we had to curtail some services to protect others. We will need to make decisions where we can to control and curtail some services.”
The leisure centres in Saltwell and Dunston have both been earmarked for closure, with a final decision on that expected next January.
At Tuesday’s meeting, the council’s Liberal Democrat opposition suggested that the council could reduce the scale of its “generous” £24m scheme of council tax support for the poorest residents, in order to free up some extra money for other areas. Coun Gannon said he feared that doing so would simply push more people into poverty and put even greater pressure on other services, adding: “On top of the human suffering, I think it is just bad economics.”
The council’s gas and electric bills are expected to jump by £4.3m in 2023/24, while leaders agreed on Tuesday to increase tariffs by up to 122% for residents living in seven high rise blocks in the town centre and Harlow Green – though officials said that those people on the Gateshead HEIGHTs district heating system would still be paying less than if they were exposed to market rates.
Earlier this month, Coun Gannon said he feared councils were facing an “impossible” situation without major new funding from Government and could go bankrupt this winter. At the time, he said Gateshead’s shortfall amounted to between £55m and £60m in 2023/24 – but this week’s cabinet report clarifies that that is in fact up to 2028.
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