South Tyneside councillors approve 2024/25 spending plans including £7million of savings and council tax hike

South Tyneside Council, at a meeting this week, approved its latest medium-term financial plan, which sets out key spending commitments and investments for the 2024/25 financial year.

Borough residents are expected to see a 4.95 per cent rise in council tax from April to help fund core council services, as well as increased ‘precepts’ for police and fire and rescue services.

South Tyneside’s council tax rise is made up of a 2.95 per cent increase in core council tax and a two per cent government adult social care levy, which is ring-fenced for social care services.

Councillor Joanne Bell, cabinet member for governance, finance and corporate services, said the council had to save £7 million to help balance the books in 2024/25.

Proposed savings for next year are on top of the £201 million the council has already had to save since 2010, with even more spending cuts predicted in future.

Despite the impacts of higher inflation on energy, staffing and provider costs, Cllr Bell said council savings for 2024/25 would have a “marginal impact” on front-line council services.

The 2024/25 financial year will also see the council use around £8 million of its reserves in order to present a balanced budget.

Labour bosses have previously hit out at the Government for reduced funding for core services, the model of funding via ‘one-year settlements’ and councils being expected to raise council tax to boost their spending power.

At Thursday’s budget meeting, councillors were told that the proposed council tax rise for council services would represent a £1.16 per week rise for Band A households, into which the majority of borough households fall.

Borough bosses also stressed that South Tyneside’s council tax would remain one of the lowest in the North East region and that more than 10,000 households in the borough would still benefit from council tax support.

Cllr Bell added the council tax rise was needed to “support the delivery of high-quality services which our residents expect and deserve”.

South Tyneside Council’s ruling Labour Group presented the budget at a meeting on February 22, 2024, at South Shields Town Hall.

Key investments included supporting residents through the cost-of-living crisis, new children’s homes and adult social care schemes, boosting cyber defences, improving support to help residents access energy support schemes and funds for local schemes, roads and footpaths.

The council’s capital programme also included town centre masterplans, district energy schemes, the relocation of South Tyneside College in South Shields, improved facilities at the Customs House and the development of housing at Holborn Riverside.

Other plans include improving council housing and boosting active travel along the borough’s coast road, expanding Mortimer Community College, upgrading the council’s vehicle fleet, tackling ‘untidy sites’, works at Middlefields and continued investment into the International Advanced Manufacturing Park.

The majority of capital projects have supporting external funding such as the £20 million Levelling Up funding for South Shields Riverside, £20 million for Jarrow as part of the Towns Fund and £20 million awarded to South Tyneside as a Levelling Up partnership area.

For the first time since becoming South Tyneside Council’s official opposition, the council’s Green Group presented an alternative budget.

Councillor David Francis, leader of the Green Group, said the amendment would “spend less than the Labour budget, reduce our commitment to future debt repayments and seek to reduce the burden on the council taxpayer”.

This included freezing town centre car parking tariffs by marginally increasing tariffs at the South Shields foreshore and reducing the number of annual council newsletter publications from three to two.

The main bulk of the proposed revenue savings were proposed to come from the removal of a further 10 vacant council posts, on top of the circa 60 vacant posts proposed by the council’s Labour leaders, to save £400,000.

The Green Group’s proposed “revenue investments” included an additional £50,000 job role to help the council deliver on its ‘ecological emergency implementation plan’ and a £260,000 uplift in street cleaning investment.

Amendments to Labour’s capital proposals also included additional investment into CCTV cameras at ‘data-driven’ locations, scrapping the plan for ‘gateway roundabouts’ and delaying the £400,000 re-flooring of The Word.

Green Party officials said the alternative budget would see a reduction in net capital spending compared to the Labour budget, equating to around £20,000 savings per year in debt charges.

The Green Group also claimed the alternative budget would achieve an underspend compared to Labour, allowing for a reduced increase in council tax for residents, from 4.95 per cent to 4.77 per cent.

Cllr Francis added the budget amendment aimed to “balance the short-term needs of the community with our long-term sustainability goals to build a brighter future for all residents of the borough”.

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After being put to the vote, however, the amendment failed to win majority support across the council chamber.

Labour councillor Joanne Bell said the Green Party proposals only dealt with 0.3 per cent of the overall Labour budget and made arguments against the Green Group proposals.

It was noted that the council had already invested more than half a million pounds into a new CCTV centre, that removing more vacant posts was “unrealistic” and that the “small extra investment” into street cleaning could have a “marginal effect”.

On the Green Group’s proposals to delay the re-flooring of The Word, Cllr Bell added the council had a duty as an owner and occupier to ensure the safety of its premises and that the “damaged flooring is a health and safety issue”.

Councillor Ian Forster, the council’s sole Conservative member, said the Conservative Government couldn’t be “solely blamed” for the council’s financial circumstances, and referenced the level of council debt built up under the last Labour Government.

Cllr Forster also referenced positive examples of government funding benefiting South Tyneside, from the holiday activities programme to the recent multi-million pound Levelling Up Fund.

Councillor Glenn Thompson said he recognised the financial pressures around setting the council’s budget and pressures on residents during the cost-of-living crisis.

However, the independent councillor added that some councils had found ways to either freeze or limit council tax rises this year, rather than “adding more pain to their residents”.

Councillor Tracey Dixon, Labour leader of South Tyneside Council, closed the debate on the budget before spending plans were put to the vote.

The council leader said the council was able to set a balanced budget despite “restrictions faced around public expenditure and the difficult fiscal context we’ve all been working in”.

Cllr Dixon added the council “requires more and more resources” every year for key services and that central government’s “continued refusal to properly fund and empower local government means that we have fewer and fewer levers to pull”.

However, the council leader added South Tyneside Council was “asset rich” and had continued to invest into roads, footpaths, housing stock and environmental and renewable energy schemes through its capital programme.

It was also noted that the budget responded to the climate crisis, along with infrastructure investment to create jobs, and measures to support the needs of residents.

Cllr Dixon continued: “Our budget-setting process has been guided by our overall vision for South Tyneside to be a place where people live healthy, happy and fulfilled lives.

“I’m confident that our budget helps us in working towards this goal”.

The budget was eventually approved by 30 votes in favour and 15 against.

The budget meeting was broadcast on YouTube and is available to watch via South Tyneside Council’s website.