Shah
By Shah Amin

Senior Staff Writer

4 December 2020

| | 3 min read

Council

Build Forward Better – medium-term plan for 2021-22 and 2022-23

Difficult decisions must be taken to set a balanced budget next year, Newcastle City Council warned today.

Civic Centre
Difficult decisions must be taken to set a balanced budget next year

Less than half (£28.8m) has come from Government, leaving it with a huge financial challenge. In September, the council’s Cabinet approved a range of in-year actions to reduce expenditure by £32 million. 

Now the authority has revealed it has to save a further £40m over the next two years on top of the £305m it has already saved since 2010. It plans to do this by remodelling services and raising fees and charges. 

It is also proposing to increase Council Tax by 2% and apply the 3% adult social care precept assumed by Government to avoid further reductions and deliver social care.

The council will also need to draw on one-off temporary funding, including reserves, to balance its budget.

There will be15 fewer posts in 2021-22, but the council is working closely with trade unions to try to avoid compulsory redundancies by not filling vacancies.

Proposals on how the authority plans to do this were published here today (4 December) www.newcastle.gov.uk/budget The public have until 17 January 2021 to have their say on them, and they will be discussed at Cabinet on Monday, 14 December 2020.

Leader of Newcastle City Council, Cllr Nick Forbes, said: “This budget consultation starts at a time of huge uncertainty, in the midst of an international pandemic and national political turmoil. The Chancellor’s one-year Spending Round – in place of a Comprehensive Spending Review makes planning for the future of our city even more difficult.

“Newcastle has lost £305 million since 2010 or £2,270 per household, and Coronavirus has cost councils across the country over £11bn this year alone. The Government have so far refunded less than half of that. They have done nothing to fundamentally change the fact that councils will be forced to make severe cuts in 2021 to balance their books.

“There is yet again an assumption from Government that councils will increase Council Tax and make full use of the adult social care precept. We are faced with the difficult choice to increase Council Tax and use the 3% adult social care precept increase to help towards the rising cost of caring for older people and some of the most vulnerable in Newcastle.

“Nevertheless, we remain confident that we can improve services, facilities and the environment. Our proposals maintain commitments to upgrade play parks and push forward with our ambitious climate change initiatives through the Net Zero Action Plan. Our vision for a Net Zero city by 2030 is the foundation for our economic vision to Build Forward Better - doing our best to both protect current jobs and create new ones at pace. 

“Our commitment to transform many of our care services, working in collaboration with our stakeholders in the city as part of a new partnership, will make sure they are as effective and efficient as possible and have the best outcomes for anyone who uses them. However, the demand for support through these services outweighs the resources available. Campaigning for a national solution to the social care crisis will continue to form part of our lobbying to Government.”

Some difficult budget proposals for 2021-22 include:

  • Reducing spend across adult social care by £8.4 million by re-modelling services, ensuring appropriate support and financial management
  • Reduce spend across children’s social care by £3.8 million by safely reducing demand on children’s social care, expanding in-house child placements and reconfiguring the residential estate
  • Review public health contracts with low population impacts
  • Increasing fees and charges across a range of services, including parking, pest control, bulky and garden waste collections and bereavement services digital streaming
  • Increasing Council Tax by 1.949%
  • Applying the 3% adult social care precept assumed by Government

Over the two years, the council plans to invest £250 million capital funding in schools, care homes, street lighting, roads and pavements, vehicles and disabled facilities grants. Capital investments improve economic opportunities across the city but by law cannot be used to fund services. Using our capital programme to deliver our net zero ambitions is also an important feature of the plan.

Cllr Forbes added: “Businesses remain committed to our area and are looking to invest in Newcastle. Despite the setback that the COVID-19 crisis has posed, we will continue to work with them to create more and better jobs. 

“We face difficult choices, and we must decide how best to cut our cloth in these trying times. But, as ever, our commitment to maintaining Newcastle as a great city remains. Our optimism is lasting.”

The proposals are on the council’s website and the public can make known their views by visiting the consultation website www.letstalknewcastle.co.uk. For those without online access there are instructions on how to comment in the council’s magazine Citylife which is out next week. 

All feedback and further announcements on local government financing will be taken into account in a revised budget report to Cabinet in February, with a debate to set the budget at full council on 3 March 2021.