South Tyneside Council increases car mileage expenses in move to retain staff and attract new workers
Trade unions had raised concerns over increasing fuel costs and the impact of the cost of living.
Car mileage expense rates claimed by council employees have been increased as part of a bid to support staff with cost of living pressures.
The decision by South Tyneside Council to update rates in line with a new HMRC rate has taken effect for claims made for journeys from October 1, 2026.
Decisions on reimbursements are linked to council employees who are required to use their car for business purposes and are subject to strict criteria.
Councillors discussed an initial report on the changes in September, which advised that trade unions had raised concerns over increasing fuel costs and the impact of the cost of living, with the increase seen as a "positive step to benefit employees".
Official council minutes from the people and organisational development committee said the revised mileage rates were originally proposed to take effect in October and would be backdated to take into account journeys from April 6, 2026.
Following concerns from some members of the committee about the "potentially significant budgetary impact of the changes", an update at the October people and organisational development committee confirmed there would be no period of backdating.
The decision to change the council’s policy on business mileage expenses to mirror that of HMRC rates results in only two claimable rates for employees linked to all car uses (except lease cars).
However, the change only affects one of these rates and involves an HMRC approved rate of 55p per mile for the first 10,000 business miles.
The original report presented to the people and organisational development committee said the decision aimed to "reduce financial burden of fuel costs for employees who are required to use their vehicle for work purposes, demonstrating that the council listens to the issues raised".
It added that the change would also "demonstrate the council’s commitment to supporting the health and wellbeing of its employees" and "assist with recruitment and retention".
The report said that most regional councils are reviewing or increasing mileage rates following the HMRC change.
South Tyneside councillors were advised that "failure to consider an increase in mileage rates for employees in line with other authorities in the North East region could leave South Tyneside Council at a disadvantage in terms of attraction, recruitment and retention."