Axe set to fall again as South Tyneside faces another £5.26million in cuts

South Shields Town Hall
South Shields Town Hall

Council bosses in South Tyneside are bracing themselves for more potential cuts.

Figures released today show South Tyneside Council is set to lose £5.26million in Government grants – which works out at £74 per household – in the next financial year.

The announcement follows a £1.7billion cut in grants for local councils nationwide announced by the Chancellor in his Spending Review statement in November.

Councillor Ed Malcolm, lead member for resources and innovation at South Tyneside Council, said the authority was facing new challenges.

He said: “The Government has published its provisional grant figures for local authorities for 2016/17.

“We are currently analysing the proposed settlement for South Tyneside in detail to look at how it impacts on the local authority’s finances.

“We have already had to deal with an unprecedented series of budget cuts from Central Government over recent years.

“We have risen to this challenge by redesigning our services for maximum efficiency and improving quality through new models of service delivery while still achieving significant savings of more than £100million so far.”

He added: “We will continue to do all we can to minimise the impact of the cuts.”

South Tyneside Council lost out to the tune of nearly £7million cut in last year’s government funding round.

The figures emerged as Communities and Local Government Secretary Greg Clark announced details of a new four-year settlement, with councils expected to rely on funds raised locally rather than Whitehall grants by the end of the decade.

Labour described the funding settlement as “cuts, cuts and more cuts” amounting to billions of pounds.

Mr Clark set out the changes in the way councils would be funded in future – offering four-year budgets for local authorities as the system moves away from grants to town halls.

He told MPs: “For the first time ever I offer a guaranteed budget to every council which desires one and which can demonstrate efficiency savings for next year and for every year of this Parliament.

“A four-year budget to give certainty and confidence.”

Under the changes, by 2020 authorities will raise money through their council tax and the retention of all the business rates levied on firms in their area.

Authorities will be able to raise council tax by 2% before triggering a referendum, but a central government funding scheme aimed at encouraging town halls to freeze the levy has been scrapped.