The region’s largest local authority will have to manage significant financial pressures for the foreseeable future as a result of ongoing austerity, councillors will hear next week.
Members of Durham County Council’s Cabinet will be told that continued government funding reductions, pressures on social care and other services coupled with uncertainty about future funding allocations mean the authority’s financial position is set to remain challenging for some time to come.
The council needs to make further forecasted savings from its revenue budget of £39.5 million over the next four years. This includes savings of £15.8 million for 2019/20 and will bring the total savings required since 2011 up to 2022/23 to £263 million.
The figures are included in the latest version of the council’s Medium Term Financial Plan which outlines the council’s financial position and sets out its budget for the next four years.
The report, which will be discussed by Cabinet members when they meet at County Hall on Wednesday, 30 January, highlights a £14.2 million reduction in Revenue Support Grant for 2019/20, a 34 per cent decrease from 2018/19. Since 2010/11, the council will have lost 55 per cent of its government funding.
Funding could be further reduced if a proposed new methodology for calculating public health grant is introduced from 2020. The change would see the council facing a potential loss of £19 million – the biggest reduction in the country.
These reductions are compounded by increased pressure on specific services where the authority is struggling to cover costs, such as children’s social care and special educational needs support, with additional demands in these areas forecast to be more than £12 million in 2019/20.
The Government announced an additional £1 million of High Needs Dedicated Schools Grant for the council in 2019/20, £4.8 million for social care and £2.8 million for winter pressures as part of the Local Government Finance Settlement in December but this is not nearly enough to cover shortfalls and there is no confirmation that any of this money will be available in future years.
The Government’s Fair Funding Review is casting further uncertainty over the level of funding that will be available for providing services in the future. The review could see the council’s funding moved to more prosperous areas of the country if a proposed new formula fails to properly take account of need and the real drivers of cost in local areas.
Cllr Simon Henig, Leader of Durham County Council, said: “We have worked hard to plan for and implement the savings we have needed to make but ongoing austerity is making this harder and savings are becoming more complex and difficult to deliver.
“It is disappointing that the Government is not fully recognising the pressures facing local government such as the current increased demand on children’s social care but even more worrying for us in the longer-term are the proposed changes to the way funding is distributed as this could see us hit by further unprecedented reductions in funding and a redirection to more wealthy areas.
“The funding we receive for educating children with special needs is woefully short of what is needed and we are proposing, for the first time ever, to use almost £6 million of our general fund resources on a one-off basis to balance our budget for 2019/20. Government has to take action to address this chronic level of underfunding which is causing issues right across the country.
“It also cannot be right that public health funding in County Durham is moved to more wealthy areas of the country whose residents enjoy a longer life expectancy than we do in the north east. We are still dealing with complex health issues from our industrial past and it would be completely wrong to redistribute our public health funding to other areas of the country who have far less need for it.
“We have already made representations to the Government raising our concerns and, along with our partners, will continue to do so during the Fair Funding review process.”
The report recommends that councillors agree a 2.99 per cent increase in Band D Council Tax for 2019/20 with an additional 2 per cent increase to the Adult Social Care Precept. This equates to a £1.45 per week rise for Band D properties and a 97p per week increase for the majority of council tax payers, who live in Band A properties.
Cllr Alan Napier, Deputy Leader of the Council and Cabinet member for finance, said: “We are seeing the Government remove our funding while making an assumption that local taxpayers will foot the bill. When the government quotes the funding we have available they are assuming that we will have increased council tax when government fails to address the cost pressures we are facing and continues to reduce our grant year after year.
“I am pleased that support for those who are having difficulty paying their bills will continue to be available through our Council Tax Reduction Scheme – we are one of only a handful of councils that still provide 100 per cent discount to those residents who are most in need.
“The situation could get worse if the government presses ahead with plans to move public health money from County Durham to more wealthy areas of the country – we need to fight against these plans which are perverse in the extreme and an affront to people living in County Durham.”
