SOUTH Tyneside Council leaders have been given an incentive to freeze council tax – for the fourth consecutive year.
Since 2011, the local authority has not increased the levy to its taxpayers through a financial incentive by central government.
It has provided some relief over a period when £75m of service savings have been made in the borough – with the loss of more than 1,000 council posts.
But it was feared the ongoing freeze may be endangered by the financial help being withdrawn.
Now it has been confirmed that support will continue until at least 2015/16.
Members of South Tyneside Council’s decision-making cabinet will now make a decision in February, after consultation with the public, on whether to continue the freeze into the next financial year.
Meanwhile, the borough council is facing a 2.9 per cent cut in overall Government funding for 2014/15 – £8.2m less according to Government estimates.
Council bosses are now going through the fine detail of the announcement, which is believed to be in line with expectations.
Inevitably, it will mean another challenging year for the authority – which faced £12m of cutbacks this time last year.
Coun Ed Malcolm, the council’s lead member for resources and innovation, would not confirm the figures, but said: “The Government has published its provisional grant figures for local authorities, and we are analysing the proposed settlement in detail to see how it impacts on the local authority’s finances.”
The funding reduction for the next financial year was announced by local government minister Brandon Lewis in a written statement to the House of Commons yesterday.
He claimed it should leave councils with “considerable total spending power” of £2,089 per dwelling, and give them the stability and certainty needed to plan budgets.
He said: “We have tried to be fair to every part of the country – north and south, rural and urban, metropolitan and shire.
“Of course, it is inevitable that individual local councils will wish to call for more funding for their area.”
Explaining the measures taken to ensure that the council tax freeze remains, he said: “It will be built into the spending review baseline for the next two years.
“We hope this will give maximum possible certainty for councils that the extra funding for freezing council tax will remain available.
“We have done our part – we now expect councils to do theirs in helping hard-working people with the cost of living.”