Northumberland County Council's budget deficit hits £36m

Northumberland County Council's headquarters in Morpeth.
Northumberland County Council's headquarters in Morpeth.

Northumberland County Council will have to slash a further £27million from its budget over the next three years.

The Conservative administration’s first budget and medium-term financial plan was approved by the council in February, including £65million of cuts over the plan period from 2018-22.

But a report to councillors says that the projected deficit over the rest of the plan period (April 2019 onwards) is now £36million and that an additional £27million of spending reductions are required.

The update takes into account changes to various funding pots, additional spending pressures and previous savings which have not or may not be met.

The next step will see proposals for the additional savings drawn up to go before councillors in October, followed by a seven-week budget consultation.

These proposals will be developed using a series of principles which include ‘setting a balanced budget while maintaining modest and sustainable increases in council tax’ and ‘continuously reviewing services in order to keep reductions to front-line services to a minimum as a far as possible’.

In February, council-tax hikes of 2.99 per cent this year – the maximum rise permitted without triggering a referendum – followed by 1.99 per cent increases in the years up to 2022 were approved.

The budget update report, which will be discussed by the council’s corporate services and economic growth committee on Monday (September 3), warns: ‘While the position represents the best estimate at the current time, the figures are likely to change as a result of the reform of local government finance.’

The deficit, or budget gap, figure represents the reduction in resources along with the spending pressures, but, according to the report, there are still a number of uncertainties.

These are the Local Government Finance Settlement confirmation for 2019-20 (expected provisionally in December with a final figure next February); the potential impact of Brexit and future cost pressures; the Government’s plans in relation to business rates and the funding of social care; and confirmation of the delivery of existing savings plans and/or assumptions.