Budget looks to combat £40m black hole in North Tyneside

Budget cuts to combat a £40m black hole facing council services in North Tyneside have taken a step forward.

Friday, 7th February 2020, 9:00 am
Updated Friday, 7th February 2020, 9:00 am
Cabinet member have backed North Tyneside Council's initial budget.

North Tyneside Council is planning to impose a 3.99% hike in council tax, amid warnings that a cash boost from government is insufficient to reverse the impact of years of austerity.

The council says it will save £4.675m in the next financial year, but will need to find a total of £39.6m by 2024.

Coun Ray Glindon told a cabinet meeting on Monday night that the council’s finances faced a “high level of uncertainty” beyond 2021, with no clarity on how much government funding they will receive.

He added that extra funding for local councils announced by the Chancellor in last year’s spending round was welcome, but “not considered sufficient to address the underlying need” given the level of cuts imposed since 2010.

The council tax rise due to come into force in April is expected to generate an extra £3.87m for the borough’s coffers, half of which will be ringfenced to meet the rising demand for adult social care services.

A further £805,000 of savings are also planned through measures including reduced recycling costs and ceasing the use of outside consultants to improve schools. The changes are expected to result in the loss of the equivalent of 1.6 full time jobs at the council.

Coun Steve Cox, the cabinet member for housing, told Monday’s meeting that the council’s decision to bring control of its housing repairs and maintenance service back in-house from Kier has resulted in £1.5m of savings.

While rent charges for council house tenants are due to go up by 2.7% and service charges by 1.7%, the authority says it will invest in new services.

That will include introducing a free pest control service, carrying out regular ‘MOTs’ on council properties, and improving the standard of empty homes.

However, Coun Cox added that the roll out of Universal Credit in North Tyneside is causing an increase in rent arrears owed to the council, with benefits recipients “struggling to keep track” of payments.

He said the council would redirect £350,000 to its income management and collection team to help improve rent collection rates and provide more targeted support to vulnerable residents.

Elected Mayor Norma Redfearn commended the council for bringing services back in house rather than outsourcing them, saying that the repairs and maintenance service had been “very, very beneficial”.

She added that residents were “really excited” about the prospect of being able to recycle more items such as yoghurt pots, which will help reduce the council’s waste disposal costs, and praised the new pest control service.

She said: “For many years we have had complaints and it is really upsetting that residents had to fork out quite a princely sum to get that service. But now we are able to offer that for free, which is amazing.”

Having been presented to the cabinet on Monday, the budget is expected to be formally agreed at a full council meeting later this month.