Why is council tax going up in South Tyneside in 2019?

South Shields Town Hall
South Shields Town Hall

Town hall chiefs are set to approve another hike in council tax as they fight to balance the books in the face of further government cuts.

Next month, South Tyneside Council will approve spending plans for 2019/20, which includes £12million worth of savings.

Testo's roundabout

Testo's roundabout

This is on top of £156million the council has already seen slashed from its funding since 2010.

On top of this, finance bosses are also having to deal with the uncertainty of not knowing how much they will have to spend in the coming years, as a four-year agreement with ministers on cash runs out in 2020.

In light of this, council tax is expected to rise by 3.95%, although councillors will still find cash for projects such as the International Advanced Manufacturing Park, Testo’s roundabout and South Shields 365 project.

Here the council answer some queries over the council tax rise.

Why is the council making cuts?

Local Government has borne the brunt of government cuts to date – losing over 60% of its core government grant in the period between 2010 and April 2019.

These cuts are set to continue.

Unlike other public bodies, Local Government cannot run a deficit.

Councils must balance the books, if income is significantly reduced by cuts to the core government grant then councils must fill the gap in their budget.

If councils do not balance the budget then the Government will balance it for them, this may not take into account local needs or the priorities of residents.

How much has been saved in recent years and how much more does the Council need to save?

Over the past nine years South Tyneside Council has already delivered £156million of efficiencies with a further almost £12million to find in 19/20 and more in future years.

This is against a backdrop of significantly increased demand for council services in areas such as adult and children’s social care.

Are all councils affected equally by the cuts?

No, the impact of core government grant cuts differs from place to place.

The amount of money each council has to spend is dependent upon a number of factors including:

* Council Tax base (of which South Tyneside has one of the lowest levels in the country)

* Number of new homes built

* Business Rate retention

* Attracting external funding for particular projects

* Fees and charges

For South Tyneside the level of government grant cut is among the highest in the country and has required the council to make significant reductions in expenditure.

Since 2010 South Tyneside Council has already had to make savings of £156million despite having higher needs than other councils across the country.

Research by the Institute of Fiscal Studies has confirmed that South Tyneside is the third hardest hit council in the country for real-term budget reductions for the period 2010 to 2016.

Will my Council Tax go up?

Yes.

In South Tyneside the increase for 19/20 is 3.95% and equates to around 76p per week for Band A households, into which the majority of households fall.

As with many areas of the country, South Tyneside is facing significant demographic pressures.

The vast majority, some 70%, of the council’s discretionary budget is spent on vulnerable adults and children.