Investing in a Fairer Future

Newcastle City Council’s draft proposals to save £30m next year were approved by councillors today (Mon Feb 13) to be debated at full council.

The city’s Cabinet considered the proposals along with a proposed 1.95 per cent rise in council tax and the implementation of the Government’s council tax precept of 3 per cent for adult social care making a total rise of 4.95 per cent.

Next year the council must save £30m and a total of £70m by 2020 – on top of £221m the authority has been forced to save over the past six years due to rising costs and cuts in Government grant.

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

More than 1,400 residents and organisations made their views known on the council’s draft budget during a consultation which ran from October to the end of December.

The proposals agreed by Cabinet today will now be debated at a meeting of Full Council on Wednesday, March 1.

Council leader, Cllr Nick Forbes, said: “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.

“The Government shows no signs of letting up on austerity, and I have a duty to prepare the city for the future.”

The council will use a 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 and create jobs.

Cllr Forbes added: “I believe these proposals will enable us to continue protecting 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. 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.”

Cllr Forbes thanked everyone for taking part in the budget consultation.

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

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

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.

 

Notes to editors:

Over the next three years the council will invest an estimated £370m in capital schemes across the city. These include improvements to Northumberland Street, Blue House Roundabout, Haddricks Mill, Central Station and on the North Bank of the Tyne.

By law, the council must set a balanced budget, and is not allowed to use money for roads, housing and other capital schemes for every day services.

The council’s un-earmarked reserves are £10m. In an emergency, enough to keep the council operating for about four days.

The council extended the budget consultation period to give residents and groups more time this year to have their say. It also developed an innovative online tool, The People’s Budget, to make it easier for residents to understand the council’s budget challenges. 380 people completed it and 160 tried but gave up!