Gateshead budget agreed but reserves used to manage shortfall
Gateshead councillors have today agreed a budget that includes proposals to meet a £15 million funding gap for the forthcoming financial year. The budget will be balanced by using reserves and increasing Council Tax bills by 2.99% (1.99% Council Tax and 1% adult social care levy).
Reserves will be used to provide a short period of time to enable 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.
Councillor 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 £179 million at a time when the need for our services is greater, and our costs to run them have increased."
Councillor Gannon added: "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."
Following public consultation, in this year's budget, bills will rise by 2.99%. Made up of 1.99% Council Tax and 1% adult social care precept to help meet the growing costs of adult social care. The increase of 2.99% will mean an extra 73p per week, or £38 per year, for Council Tax payers in the lowest band A properties which make up 60% of properties in Gateshead.
Councillor Gannon said: "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 Council's current local Council Tax Support Scheme helps over 12,300 residents on a low income with a reduction in their Council Tax.
Gateshead councillors have today agreed a budget that includes proposals to meet a £15 million funding gap for the forthcoming financial year. The budget will be balanced by using reserves and increasing Council Tax bills by 2.99% (1.99% Council Tax and 1% adult social care levy).
Reserves will be used to provide a short period of time to enable 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.
Councillor 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 £179 million at a time when the need for our services is greater, and our costs to run them have increased."
Councillor Gannon added: "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."
Following public consultation, in this year's budget, bills will rise by 2.99%. Made up of 1.99% Council Tax and 1% adult social care precept to help meet the growing costs of adult social care. The increase of 2.99% will mean an extra 73p per week, or £38 per year, for Council Tax payers in the lowest band A properties which make up 60% of properties in Gateshead.
Councillor Gannon said: "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 Council's current local Council Tax Support Scheme helps over 12,300 residents on a low income with a reduction in their Council Tax.
