Leader outlines financial crisis facing authority

The leader of Northumberland County Council has expressed deep concerns over the Government's funding settlement.

Wednesday, 10th February 2016, 8:04 am
Updated Wednesday, 10th February 2016, 8:09 am
County Hall, Morpeth, headquarters for Northumberland County Council.

Since 2011 Northumberland County Council’s budget has been cut by £148m. However over the next four years the council has to find another £58m to cut, leaving it with just £10.3m of core funding from the Government by 2020.

Cllr Grant Davey said: “This means that residents in Northumberland will be paying even more whilst receiving even less in services.”

The Government has changed the way it calculates funding for councils. The settlement has hit rural councils the hardest, whilst authorities are expected to raise more money locally through council tax and business rates.

Northumberland will be more badly affected than most – facing a further 82.5% cut in its core funding from Government by 2020 - above the national average of 76.4%.

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The leader also criticised the central Government claim the council is ‘only’ faced with a 2.5% cut – much higher still than the England average of 0.5%.

Cllr Davey said: “The Government’s assertion and the spin being put out by local Tories that a cut is not a cut if they say it’s not and that we are receiving only a small cut in our funding is misleading.

“They have changed the way they calculate funding for councils and have automatically assumed we will implement a 16% hike in council tax and assumed there will be more homes and businesses in the county to pay tax.

“They are ignoring the additional pressures all local authorities are facing, such as increased inflation and the impact of policies they have introduced, such as the national living wage, apprenticeship levy and pressures in other services too. Whilst offering a de-minimus change on rises in council tax before holding a referendum for rural areas to ensure pressure is taken off HMRC and placed on rural councils.

“Whilst they announced councils can introduce a new 2% council tax per year for adult social care, this won’t even cover the increase in pay for adult social care workers when the Government’s Living Wage comes in from April.

“The Government also announced some new funding such as the new improving better care fund and the new rural services delivery grant, but these have just been taken from the normal funding for local government- it’s not an increase .

“The Government’s aim for us to raise more money through increasing business rates might be good if you run a metropolitan council in the south of England, but here in a relatively remote and sparsely populated county it’s much harder to attract new businesses.”

“We have already, and will continue to, use our reserves to help introduce the ongoing cuts; however they are not a solution and can only be used once.

“While the council welcomes the recent news and support from Berwick MP Anne-Marie Trevelyan which means that the council will receive an additional £3.15m over the next two years it does not change the overall financial position of the council.

“It’s another example of smoke and mirrors as the extra money is one-off funding and still means the council has to cut £58m from its budget over the next four years. As set out in the settlement from the Chancellor it also means the council will still need to raise council tax for local residents by 16% over the next four years.

“Despite all the cuts to date we have worked hard to protect frontline services, whereas other local authorities have cut many services all together.

“We are looking to safeguard many libraries by moving them into leisure centres, reviewing our property and creating one-stop-shops of council services in market towns and selling off or leasing other buildings no longer needed. We have worked hard to ensure funding for subsidised transport is still provided, albeit with a reduced budget. We have also reduced our staff by a fifth (excluding schools). However the bottom line is that the levels of ongoing cuts mean we are going to have to make more changes and consider cutting some services.”

The budget for the next two years and its medium term financial plan will be discussed at the economic growth and corporate services committee on February 16, at the cabinet meeting on February 22 and at full council on February 24.