Councillors in South Tyneside have “reluctantly” agreed to accept a 20% cut in the grant they get from the Government over the next four years.
South Tyneside Council’s Cabinet said they are not happy with the reduction but feared not agreeing to the fixed-term deal would mean them receiving less in future.
Coun Ed Malcolm, cabinet member for resources, said: “The Government indicated that if councils did not accept the offer, then it could not guarantee a specific level of funding and would announce allocations on an annual basis.
“Rejection is likely to be financially detrimental to councils including South Tyneside.”
The 20% reduction, which is in addition to the 45% reduction in previous government grants since 2010, means the council’s ability to maintain its services will be “challenging”, he said.
Coun Malcolm said: “I have read letters in the local newspaper asking what the Council Tax pays for.
“Council Tax is not the issue here, the dilemma we face is over the amount of money we get from central Government.
“People need to understand we (the council) are not the enemy, the actual enemy (the Conservative Party) has just finished their conference in Birmingham today.”
Council leader Iain Malcolm said the cabinet was agreeing the settlement “reluctantly” and without enthusiasm.
Coun Ed Malcolm said accepting the settlement did not mean the cabinet were endorsing it.
The cabinet also considered a quarterly budget review which showed the council is currently due to spend £7million more than originally budgeted for this year.
The rise, from £130million to £137million, is due in part to a £10million rise in the cost of providing adult social care.