The economic turmoil unleashed since the Government’s mini-budget last week could pose a “massive risk” to council services in Newcastle, politicians fear.
Newcastle City Council and other authorities across the region were already warning of a dire financial situation, with inflation and the energy crisis sending civic centre bills spiralling by tens of millions of pounds. And there are now concerns that the market chaos of recent days, since Chancellor Kwasi Kwarteng announced a raft of huge cuts and borrowing last Friday, will make the predicament even worse.
The Local Democracy Reporting Service revealed last week that the city council was predicting that its costs would rise by more than £30m next year and that it would be left with a budget deficit of £22.2m. At a cabinet meeting on Thursday evening, councillors were told that the authority is currently projecting a £6.2m overspend in the current financial year – due to factors including a larger than expected pay rise for staff and inflated contract costs.
