Council leaders have refused to rule out a potential rise in council tax as they plan to deal with £20m cuts in funding.
Officials at North Tyneside Council have begun the early stages of planning the 2014-15 budget after being told the authority needs to make £20m of savings that financial year and an anticipated £17m the following year.
But Mayor Norma Redfearn has said there will be no cuts to frontline services and that the authority would find the necessary savings despite the pressures, including in the current budget.
She said: “We were left to find £12.2m cuts this year. There was a financial plan but they (Conservatives) hadn’t identified how it had been done.
“We’ve got to find £20m cuts for next year then £17m the year after.
“Despite the fact they knew they would have to find that money, there is no financial plan. We’ve had to start right at the beginning to see how we can find these savings.”
And Coun Ray Glindon, cabinet member for finance, said one way to help counter the £20m cuts would be to increase council tax as even a one per cent rise brings in more funding than the government grant for freezing council tax levels – and would give long-term finance help.
Speaking to the News Guardian, he said: “It’s hard to do council finances as you never know what is around the corner.
“There may be an unforeseen outgoing that was not planned, such as when we had to find £9m to replace a bridge on the Coast Road.
“We have lost about £8m over the years by not putting up council tax.
“It is a big decision about whether to put up council tax or not. It can only go on for so long.
“If there is no raise in council tax, we will have to find an extra £2.4m in savings onto of the £20m.
“At the end of the day, no one wants their services cut.”
Coun Glindon admitted the council was having trouble bringing money in by selling off greenfield and brownfield sites as the price of land had dropped.
He added that the regeneration of the Spanish City site and Swan Hunter site were key to the authority, resulting in some schemes on the council’s capital plan being stopped due to a lack of funding.
Mrs Redfearn said the current budget, put in place by the previous Conservative administration, had to be looked at and rectified as a number of schemes had been delayed until after the mayoral election, including refurbishment of Whitley Bay and Tynemouth crematoria and replacing refuse wagons.
“We’ve had to pick up these schemes after they have been delayed,” she said. “To do that we’re going to have to borrow this year.
“There has never been a budget to repair or replace things so we had to find the money.
“When Labour was last in, borrowing was only £230m now it’s £525m.”
Mrs Redfearn added the council had made around £300,000 savings through a restructure of the authority’s management team.