Council tax to rise by 4.95% and more cuts expected after Government slashes funding by £11million

Council tax bills in South Tyneside are set to rise for the second year running to help counter a new £11million government funding cut.

Discussing Parliamentry Boundary changes, Coun Ed Malcolm.
Discussing Parliamentry Boundary changes, Coun Ed Malcolm.

They are expected to increase by 4.95 per cent from April – adding almost £50 a year to the cheapest property band.

The move comes in response to South Tyneside Council’s annual revenue budget being slashed from £125million in the current financial year.

In total it has had to make £145million of efficiencies in the past eight years – and council bosses expect further cuts next year.

Today they insisted they had no option but to raise council tax in a bid to protect essential services.

These include adult social care and children’s services, which are facing unprecedented – and rising – demand and now consume about half the budget.

Coun Ed Malcolm, the council’s Lead Member for Resources and Innovation, said: “In the absence of a fair funding solution we are in the unfortunate position of having to raise council tax further to help plug the gap.

“In areas such as South Tyneside, where tax bands tend to be lower than average, this effectively means we are asking more from already economically disadvantaged people to help poorer people.

“It was extremely disappointing that the government has chosen not to address the continuing funding gap in children’s and adult social care.

“We continue to face funding pressures in these areas and only an injection of new money from central government will be able to protect these.

“We need a fair funding system. We need redistribution of how local government money is given, away from leafy boroughs to places of deprivation like South Tyneside.”

The council tax increase will add 91p a week to Band A properties, which are the most numerous in South Tyneside.

The rise comprises of 2.95 per cent council tax increase and a two per cent adult social care levy.

The cuts add to research by the Institute of Fiscal Studies which shows South Tyneside was the country’s third hardest-hit council financially 
between 2010 and 2016.

Figures reveal it had 54% less to spend, which represents £746 less for each household, or £402 below the national average.

Coun Malcolm said new income generation streams around existing services, including leisure, were being sought, and that better value for money was being delivered on external contracts.

The council had also been successful in working more in partnership with community and the voluntary sector to keep open existing community libraries and community associations, he said.

He added: “The people of South Tyneside have been really supportive and come forward to work with us to protect some of our important services such as community facilities and branch libraries.

“Without the support of the public these facilities would have been under threat of closure and now have the opportunity to go from strength to strength.

“It is only by working together in partnership that we are able to reduce the negative impact that these unprecedented government cuts are having on our communities.

“There is no doubt that South Tyneside has been dealt an unfair hand but as a council we continue to do all we can to making a positive difference to people’s lives and to ensure that our borough is a great place to live, invest and bring up families.”

Coun Malcolm revealed the council had shed about 30 jobs out of around 2,700 non-teaching posts in the current financial year.

Although no further losses were planned, he admitted a process of ongoing assessment meant further losses could not be ruled out.

In a boost to the borough, he said visitor numbers had increased, business confidence was high, and health outcomes were improving.

And he insisted the employment rate, which had increased by 6.5 per cent since 2010, putting about 5,900 more people into work, was a clear indication of progress.

He also pointed to other successes – including children’s services being rated in the top 25 nationally – as being another positive indicator.

Coun Malcolm said the council was making significant improvements through investment in the borough and surrounding areas.

This included to the centres of South Shields, Hebburn and Jarrow through multi-million pound projects, and in the International Advanced Manufacturing Park (IAMP), next to Nissan.

The budget proposals will be put to the council’s Cabinet on Wednesday, February 7, and to full council on February 22.