Middlesbrough 'growth' budget will see more investment, along with 4.99% council tax increase

Middlesbrough’s initial budget proposals for 2025/26 have been set out with a focus on “growth”, while the cost to residents will be a maximum 4.99% council tax increase.

This budget aims to move onto the "reset" phase of Middlesbrough Mayor Chris Cooke’s "recover, reset, deliver" pledge, made following his election in 2023. The mayor said the council is taking steps towards financial sustainability.

Some of the growth areas include investment in tree maintenance, pest control, area control (such as street cleaning) and events to increase footfall and engagement in the town. Approximately £7m of savings are required next year. Middlesbrough Council has confirmed that many of the savings proposals build on the work done to transform the way social care is delivered, continuing the council’s focus on its highest spending areas.

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Changes have also been proposed to improve foster care and support more families to stay together, avoiding the cost of care placements. New methods to help adults live more independent lives would also be introduced.

If the proposals are approved, council tax will increase by the maximum amount allowed without a referendum, which is 4.99%. The Executive has been advised to do this by outgoing Director of Finance, Debbie Middleton. The split is 2.99% and 2%, with the 2% being ring-fenced for adult social care.

Government funding decisions assume that councils will put up council tax by the maximum permitted amount, with the report to be presented to the Executive calling the current government funding formula “not fit for purpose”.

In terms of the big picture of funding: in 2023/24, 83% of the net revenue budget was spent by Middlesbrough Council on adult and children social care. This figure is down to 79% during 2024/25, which the Director of Finance’s report says is possible “as a result of transformation and budget savings implemented in 2024/25”. It does however paint a picture of where the vast majority of local government money ends up and will continue to end up going forward.

Mayor Cooke was asked if this budget was firmly into the reset phase, or if there was still recovery. He said: “I think there’s a small amount of recovery, until we can have exceptional financial support in the rear-view mirror fully, because that won’t actually happen until we get to setting the next budget”.

One of proposed budget reinvestments is £100,000 in the next year into “youth services providers”. When discussing the proposals, Mayor Cooke said: “More youth clubs, more youth outreach, will only ever actually help with our children’s social care issues, because if those children engage, then we work with them in a much better way, that will ultimately save us money in the long run, and it’s the right thing to do.”

The report also details that as for area care, there will be an increase in expenditure of 10% “to improve service levels for grass cutting, street cleansing and shrubs and hedgerow maintenance”. It was confirmed that there would be three extra grass cuts per season.

Councillor Nicky Walker, executive member for finance, said it was vitally important that the Council rebuilt and protected its levels of reserves which had depleted over recent years. Middlesbrough currently has the fifth lowest level of reserves relative to the size of its budget of all single-tier councils in the country.

She added: "We are not yet fully out of the woods and we must continue to transform the way the Council provides its most expensive services and deliver the previously agreed and newly proposed savings."

There are 26 budget savings proposals that are considered to “have minimal, or no effect on front line service delivery levels”. These include reduction in energy usage, which is due to save £150,000 in 2025/26, as well as a £20,000 saving from stationery reduction, which equates to a 30% reduction in the budget for stationery. These proposed savings, that do not require public consultation for 2025/26 total £6.787m.

There are four budget savings proposals that are “considered to potentially affect front line service delivery levels”, and these require public consultation. When it comes to council car parking, there is a proposed “increase in fees and charges above the 2% increase (average 3.5%) within the Fees and Charges policy for Council Car Parking”.

There are 20 potential job cuts as a result of the budget, however, this was qualified with an explanation that 12 of these posts are currently vacant, and not being advertised, so it would mean eight jobs lost. Additionally, eight new full-time jobs could be crested as part of a savings proposal linked to home to school transport.

Middlesbrough and Thornaby East Labour MP, Andy McDonald has reacted to the budget proposals. He expressed his view that the executive team have "got a grip of the finances and are now looking to invest in services which improve the lives of residents is major testament to their determination to turn things around".

Mr McDonald was also pleased about the increasing events budget, where there will soon be a larger team if proposals are approved. He added: "We know the value cultural occasions such as Orange Pip Market, Mela, Art Weekender and all the other brilliant events bring to Teesside."

What happens next is that Middlesbrough Council’s elected Executive will vote on whether to endorse the proposals which aim to “balance the budget” and from there, it can go out to public consultation. This consultation phase will last from December 5, 2024, to January 8, 2025. Final decisions on the budget will be taken during a vote of all councillors in February.

More updates on the proposals as well as reaction from across Middlesbrough’s political spectrum is expected throughout the week.

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