We’re having to take further action following increased budget pressures for 2025/26
South Tyneside Council is taking further action to address an increase in budget pressures for the current financial year.
Following the latest quarterly monitoring report, South Tyneside Council is now forecasting a cost pressure of almost £13million - up by £2.7million since its last report.
The Council states that the increase reflects the ongoing challenges that are being faced by local authorities across the country.
South Tyneside Council has confirmed that the majority of these pressures remain concentrated in statutory services, those the Council is legally required to provide.
These include adult and children’s social care, education, Home to School Transport, highways, and essential operations.
The local authority has revealed that it is seeing unprecedented demand for both adult and children’s social care, with more people requiring complex support.
As a result, this is driving up costs, especially for residential placements and commissioned care.
The cost and demand for SEND services, particularly home to school transport, is also continuing to rise, prompting efforts to review eligibility, improve commissioning, and maximise efficiency.
Cllr Jim Foreman, Lead Member for Governance, Finance and Corporate Services at South Tyneside Council said: “We are being completely upfront about the financial pressures facing the Council.
“Demand for statutory services has increased since our last report, and we know this will be concerning for residents.
“However, we have taken action to reduce spending and maximise income in all areas of the business to offset the increase in statutory services we are encountering.
“Our priority remains protecting vital services, especially for the most vulnerable, while ensuring the Council’s long-term financial sustainability.
“We will continue to monitor the position closely and adapt our plans as needed.”
South Tyneside Council has already taken measures to manage spending, including:
- A 37% reduction in agency staff since last year, saving £1.5million annually.
- A hold on recruitment except for critical roles.
- Corporate oversight of high-cost placements for children, ensuring statutory compliance and best outcomes.
- Maximising income and grant utilisation.
- Accelerating delivery of new in-borough accommodation for looked after children.
- Reviewing commissioning models and service eligibility.
- Reduction in discretionary spending and tightening of capital programme spend.
The local authority’s Medium-Term Financial Plan sets out a risk-based approach to reserves and ongoing engagement with residents and partners.
While the use of reserves will be necessary for the current financial year, South Tyneside Council states that it is determined to avoid a significant overspend and maintain robust financial standing.
Council bosses are also continuing to call for a much fairer funding settlement compared to the one received that reflects the real cost of delivering services in areas of high deprivation.