Gateshead Council budget meets financial challenge

by The Gateshead Housing Company & filed under Gateshead Council, News.

Cabinet members at Gateshead Council today (24 February) agreed to recommend to Council a budget that focuses on protecting those in the community who need help the most, providing services in new and more efficient ways, generating additional income and investing to ensure the future prosperity of Gateshead.

Gateshead-Council-LogoSince 2010, government funding grants to the Council have been cut by 45% and Gateshead Council has had to find savings of over £90.6million.

The latest reduction in government funding has left a further funding gap of £46million over the next two years (2015 -17).

Until now, Gateshead Council has managed to deliver the savings required without increasing council tax or using its general reserves.

However, because of continuing and significant reductions in central government funding, Gateshead Council, like many others across the country, is having to do both.

For the first time in four years, council tax will increase by 1.95%. For the majority of residents (61%), the increase amounts to 37p a week and no more than 55p a week for Band D households.

Leader of Gateshead Council, Mick Henry, said: “As central government continues to cut our funding, we’re forced to make some very difficult decisions.

“We now have £328 less to spend on each Gateshead resident than we did in 2010. These cuts, year on year, make it harder and harder to set a balanced budget, but that is by law what we have to do.

“Looking towards the future, and balancing the many needs we have to meet, we’ll continue to have an ever more difficult task ahead of us.

“But we remain resolute in meeting whatever challenges are put before us, keeping an eye on our long-term vision; and aiming to do our very best for the people of Gateshead, both now and into the future.

“We continue to deal with these budget pressures in a fair, measured, and principled way, ensuring that the most vulnerable in our society are protected as far as we’re able with the resources we have.

“By working smartly and practically to develop solutions with partners and local people, Gateshead will continue to be a great place in which to live, work, visit and invest.”

To help stimulate economic growth, Gateshead Council is proposing to invest over £195million over the next three years. This investment will help create jobs and bring in additional income and resources.

Planned investments include improving council housing and transport infrastructure, new renewable energy schemes, additional housing and investment in schools.

This money can only be spent on capital projects within Gateshead and cannot be used to provide public services.

Councillor Henry said: “In developing our budget proposals we’ve listened carefully to our residents.

“We’ve changed several of our proposals in response to what the public have told us and we’re going to use some of our general reserves to give us time to change the way we deliver some services.

“This is not a decision we’ve taken lightly, but such is the scale of the cuts we feel the time is right time to use these funds. However, we also realise that when they’re gone, they’re gone.

“The increase in council tax has been a hard decision to make as we’re all too aware of the tough times faced by many residents.

“However, this increase, along with some increases in other paid-for services, will help us provide some of those services valued by our residents.”

In this year’s Budget:

  • No libraries will close but some may have reduced opening hours or be relocated to other buildings
  • Opening hours for leisure facilities will reduce, but not as significantly as originally proposed; we will use general reserves to allow more time to review operations and explore alternative delivery models
  • Some fees and charges will increase with inflation, with venue hire and annual car parking permits increasing by more than inflation.

Extensive work with employees and trade unions has been carried out in an effort to minimise the number of redundancies resulting from the budget proposals.

It is estimated around 193 posts will be lost, and efforts have been made to limit the number of compulsory redundancies.

However, the new reductions are in addition to around 1,700 posts that have already been lost at Gateshead Council, including a 50% reduction in management.

Councillor Henry said: “Setting the Budget this year has been a huge challenge. These are tough times and we’ve had some tough choices to make. But despite significantly reduced resources, we still have an ambitious vision for Gateshead and we’ll continue to work hard to achieve it.

“We’ll use the resources that we do have to support those most in need and we’ll seek out new opportunities to prosper and invest in the continued successful regeneration of the borough.”

A full Council meeting on February 26 will discuss the Budget recommended by Cabinet.