South Tyneside Council faces a £24million funding black hole over the next two years, with major savings needed to balance the books.

The authority is forecasting a £12million shortfall in both 2027/28 and 2028/29 as rising costs continue to pile pressure on its finances.

And councillors have been warned that freezing council tax for those two years would add another £8million to the gap – taking the total savings needed to around £32million.

Adult and children's social care are among the areas where savings are being explored, while non-statutory services such as culture and welfare could also come under scrutiny.

Cllr Jason Diamond asked if the authority could avoid putting council tax bills up.

placeholder image — Cllr Jason Diamond asked if the authority could avoid putting council tax bills up.

Finance chiefs have outlined potential measures including reducing the number of people in residential adult social care and children placed outside the borough, reviewing support services and making greater use of technology, including AI.

Detailed budget proposals will be drawn up by the new Reform UK administration in the coming months and put out to consultation before going to the council's ruling cabinet and then full council for a final vote in February.

The scale of the financial challenge was laid out as the council's medium-term financial plan was discussed by its overview and scrutiny coordinating and call-in committee on Thursday (September 17).

Stuart Reid, the council’s director of business and resources, said the authority benefited from a multi-year government settlement, allowing it to plan ahead, along with associated transitional grant funding.

Susan Sybenga, the council’s Reform UK deputy leader and cabinet member for finance and resources.

However, the council still faces external pressures including inflation, social care, interest rates and fuel costs, with savings needed across the board.

Other options being explored include “transformation” activities and looking at areas outside its core business where the council acts commercially.

The £24million funding gap for 2027/28 and 2028/29 was already modelled before the new Reform UK administration came to power in the “all-out” local elections in May 2026.

Mr Reid said the need for savings was being driven by spending pressures.

Finance chief Stuart Reid has warned savings are needed across the board.

He added that South Tyneside’s council tax was one of the lowest in the region and, while setting levels remained an “important political decision”, council tax “continued to be a key source of income”.

Reform UK councillor Jason Diamond, vice-chair of the scrutiny committee, asked whether there was a costed plan for a “zero per cent” council tax increase and whether the council could “get the savings from somewhere else” to avoid tax rises.

Mr Reid said a council tax freeze over the next two years would increase the council’s budget gap by around £8million to £32million, and finding such savings would be “extraordinarily difficult”.

Councillor Susan Sybenga, the council’s Reform UK deputy leader and cabinet member for finance and resources, said current budget plans were a “work in progress”.

She added: “Financially at the moment it’s very challenging. There are lots of difficult decisions but these are necessary if the council is going to remain financially sustainable and continue to make its own decisions.

“There are many other councils in the same position due to government funding being cut since 2010 and then in recent years, failing to keep pace with rising costs.”