Council tax bills are set to rise in Gateshead as the borough’s top councillors rubber stamped the latest budget proposals.
At a meeting on Tuesday, the cabinet voted to recommend the budget to councillors who will vote on it at a full meeting later this week.
If the plans are given the go-ahead, council tax bills are set to rise by 2.99%, which includes a 1% precept for adult social care services.
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In financial terms this means that households in Band A properties, which are the majority of the borough, will pay an extra 73p a week while those in Band D properties pay £1.10 more.
A report heard by the authority’s cabinet admitted this would be a blow to low income residents but said that funding cuts have left the council with “little choice” if it is to protect vital services.
The report also said the borough would continue with the council tax support scheme which means around 12,000 of Gateshead’s poorest residents pay no more than 8.5% of their liability.
It said: “The council recognises the impact of the recommended council tax increase on some of the most vulnerable in society and particularly those on fixed incomes.
“However, a combination of continued cost pressures and significant funding reductions has left the council with little choice but to increase council tax to protect the delivery of essential council services to the residents of Gateshead.
“The council will continue to provide the current council tax support scheme that enables targeted support for those residents that are likely to be most affected by the increase.”
In the financial year 2022/23 Gateshead Council needs to save £5.8m, which it will cover using temporary funding from the “budget sustainability reserve”.
This will give the authority time for a fundamental review of the budget and develop a new approach to budgeting to make the council more sustainable in the future. Despite using reserves, the council will still need to make savings of £45m over the next five years.
The borough plans to spend £5.9m on adult social care and £2.9m on children’s social care to meet increased demand and spiralling fees.
Meanwhile the authority wants to invest £1m to to continue social work in schools and deal with increased demand in children’s social care looked after children.
It also wants to invest £400,000 in parks and open spaces as well as £600,000 to fund a social worker academy.
This academy would tackle increased work loads and the difficulty the authority has recruiting experienced social workers.
Additionally £200,000 will be spent on extending “early help” posts which support families at an earlier stage to stop them needing social services.
Speaking after the meeting Coun Martin Gannon, Leader of Gateshead Council said “Reserves should be used only in emergencies, but given the scale of the challenge we face we have no option at this time but to use them. But it’s not a solution in the long term. I’m genuinely concerned that councils like ours will not be sustainable in the next three years and we’re not alone in that. Over the last ten years we’ve lost a massive amount of our budget and have had to make cuts of £179m at a time when the need for our services is greater, and our costs to run them have increased.
“We’re already looking to the future and how we’re going to manage over the next three years. We’ve got a radical new budget approach, we’re starting from scratch and prioritising our spending in the areas that need it the most. Focusing the limited resources we do have to support the most vulnerable in our communities to help them thrive, it’s the decent and it’s the right thing to do.
“In addition, we’re also committing to building a more sustainable Gateshead for our residents. Our recently agreed Economic Development Strategy will see a focus on good jobs, growing businesses and great places. Working together with our public, private and voluntary sector partners - we retain our bold ambition for residents and continue to make investment in ground-breaking projects such as NewcastleGateshead Quays, heat from mine water being used to heat local homes and business, and growing solar farms as just a few examples.”
He added: “When giving councils their funding, the Government made an assumption that they would raise Council Tax to cover any shortfall, passing the financial burden on to those who least can afford it.
“Relying on Council Tax to fund local authorities is fundamentally unfair. It’s unfair to areas like Gateshead who have more properties in the lower Council Tax bands, A-C. This means we’re not able to raise as much as other more affluent areas, meaning our financial gap is bigger when our need is greater. It’s an outdated national system that needs radical reform. We can’t change it ourselves, but we’ll continue to put pressure on the Government to make it a fairer system for all.
“We know that raising Council Tax will not be a popular decision, but unfortunately it’s one we must make in order to keep providing our services. We understand that people are struggling, the cost of living at the moment is higher than it’s been since the 1970s and it doesn’t look like it’s going to get easier any time soon. We know that any increase in bills will have an impact on residents and we’ll make sure that those who need it will get extra help. Our Council Tax Support Scheme is there to help those most likely affected by the increase.”
The proposals will be voted on at a full council meeting on Thursday.
