Austerity will cost the North East £220m this year as council cuts continue

Austerity will cost the North East £220m this year as vital cuts to services are made for a fifth year in a row.

And within a year council’s could start to struggle to even deliver what they are required to by law.

This stark warning from leader of South Tyneside Council, Iain Malcolm, comes as authorities across the region enter their final week of budget setting, and for the first time in several years many authorities have chosen to grasp at a council tax rise to bring in vital funds.

The Labour leader, whose authority has had to shred 1,500 jobs to cope with reductions in Central Government funding since 2010, said 2016 could be the year some councils start to seriously struggle.

“If the Government is going to cut the way that they are now, councils will not be able to provide statutory services that they are legally required to,” said Coun Malcolm.

“I’m not going to put a timeline on it because I’m not having it as a D-day but some councils across the country will struggle in this financial year, but not necessarily in this region.

“But by 2016-17 if there is no change in Central Government’s attitude then more councils will struggle in 2016 to fulfil their statutory obligations.

“I would say South Tyneside is at the forefront of innovation. I won’t name the councils that will struggle but South Tyneside would struggle to find any more meaningful savings in the 2016-17 financial year.”

Cut backs since the Coalition Government came into power in 2010 are estimated to have cost the North East an enormous £557m in reductions to grants to run services like adult social care, leisure centres and libraries.

It’s also estimated that 14,000 local authority posts have been scrapped around the North East in the last five years.

However the Government maintains that funding settlements since 2010 have been fair.

For the first time in years council tax has been drawn on as a way of bringing in more funds to cash-strapped authorities and bar Redcar and Cleveland, which made a 1% cut to council tax, all councils have either gone for a rise or accepted the Government’s freeze grant.

For Newcastle and Gateshead councils the tax hike was the first in four years.

Coun Malcolm said:

“All councils have tried to do what’s right in their particular areas. We’ve got a strategic partnership with BT to do our back office functions and that’s worked extremely well for us but it’s not been a one size fits all solution.”

He added that despite intense cuts for a fifth year, in which his authority must save £22m in the year 2015-16, satisfaction with local authorities remains extremely high as shown by various survey.

2015/2016 spending power cut

Newcastle: £40m

Gateshead: £20m

Durham: £16.3m

North Tyneside: £14m

South Tyneside: £22m

Northumberland: £28m

Sunderland: £36m

Middlesbrough: £14.1m

Redcar and Cleveland: £3m

Stockton: £6m

Darlington: £14m over next two years.

Hartlepool: £5m

Job losses since 2010:

Newcastle: 2200

Gateshead: 1890

County Durham: 2000

North Tyneside: Information not available

South Tyneside: 1200

Northumberland: 1500

Middlesbrough: 728 with a further 600 by 2020.

Sunderland: 2,800

Redcar and Cleveland: 750 post reductions.

Stockton: 740 people

Darlington: 500

Hartlepool: Information not available

Council tax rise

Newcastle: 1.95% (first rise in four years)

Gateshead: 1.95% (first rise in four years)

County Durham: 1.99% (second year of a rise after gap)

North Tyneside: No rise

South Tyneside: 1.95%

Northumberland: 1.99%

Sunderland: No rise.

Middlesbrough: 1.85%

Redcar and Cleveland: 1% reduction.

Stockton: 1.9%

Darlington: 1.99%

Hartlepool: No rise.

 

Source – Sunday Sun,  08 Mar 2015

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