Investing for a fairer future

Civic Centre
Civic Centre, picture courtesy of Chronicle

Newcastle City Council announced today (Friday Feb 3) its budget plans for the next three years following a consultation with the city.

Government-imposed budget reductions and cost pressures require the council to save £30 million next year and a total of £70 million by 2020, while demand for services is rising.

This comes on top of the £221 million the authority has already been forced to save over the past six years. To put this in context, council tax would need to more than double to replace Government grant lost over the past six years.

By 2020 the council will have to be entirely self-financing.

Next year’s challenge is particularly acute in social care, where the council expects costs to rise by £20.8 million over the next three years but additional funding amounts to only £5.6 million.

Reluctantly, the council proposes to approve the Government’s council tax precept of 3 per cent for adult social care and a council tax rise of 1.95 per cent to protect frontline services. This will put an extra £1.37 a week on a band D property and 91p on a band A.

Despite the financial challenges the council will continue to support the most vulnerable with one-off funding in a number of ways including:

  • Securing the future of Byker Lodge* for at least two years
  • Maintaining beds for the homeless and those in crisis
  • Boosting support for those in caring roles, in response to concerns raised by carers through the consultation
  • Dedicated funding to test new approaches to waste management across the city

A one off £3.9m dividend from the council’s stake in the airport will be invested in the city by:

  • Supporting the delivery of 449 affordable new homes and specialist housing
  • Creating a £1m Life Chances fund to tackle poverty and support community initiatives
  • Setting up a £900k fund, the Great North City Fund, to attract and deliver major sporting/cultural events

Since 2010 the council has shed one in three jobs. Although numbers are smaller, it still expects to lose 100 staff next year and continues to work closely with trade unions to try and avoid compulsory redundancies.

More than 1,400 residents and organisations made their views known in the consultation after the authority published draft budget proposals in October. It has helped shape the budget proposals.

Leader of Newcastle City Council, Cllr Nick Forbes, said: “Residents and organisations have made their views very clear over the last few months and we have listened to them. We are very conscious of how we spend every penny, and it is this financial discipline and rigour which has allowed us to continue supporting some of the most vulnerable in our city.

“This does not mean that our problems have gone away - far from it. Government grant continues to fall rapidly, and by 2020 the council will have to be self-funding - entirely reliant upon council tax business rates and its own income. This signals an end to the post-war consensus in which Government grant paid for bin collections, street cleaning, tree planting, libraries, social workers and community centres to name a few.

“This is a shameful situation, but as the Government shows no signs of letting up on austerity and its terrible consequences on cities like Newcastle, I have a duty to prepare the city for the challenges ahead. That is why we are using our dividend from the airport to invest in housing to grow the city’s council tax base and use the city’s growing reputation for hosting major events to help attract new investment. We must create jobs if our economy is to grow.

“Another of our top priorities is the protection of the most vulnerable which is why we continue to support dementia care services, the homeless and people who suffer a crisis.

“Most people accept a modest rise in tax to protect frontline services and reluctantly we are having to propose this but it’s a sticking plaster over a gaping wound which only Government can and should address urgently at a national level. It is not right, and nor is it fair, to fund social care through local taxation.

“I would like to thank everyone who took part in this year’s budget consultation, we could not do it without them. I believe our proposals reflect what really matters to them.”

Cabinet will meet on Monday, February 13, to consider the latest draft budget report entitled Newcastle 2020: Investing in a Fairer Future. It will then go to a meeting of Full Council for debate and a vote on Wednesday, March 1.

Visit the budget pages