Stockton Council to increase council tax by 4.95% and borrow £20m under new budget plans

Stockton Council leader Bob Cook
-Credit:Reach Publishing Services Limited


A Labour-led council plans to increase council tax by 4.95% in the coming year, as well as borrowing £20m and using its reserves to fill a major funding gap.

The budget for the next financial year and latest medium-term financial plan until 2028 are to be discussed at Stockton Council's next cabinet meeting next Monday (February 10) before it is debated at a full council meeting on February 19. It proposes to raise council tax by 4.95% - just under the 5% maximum - with a core council tax increase of 2.95% and a 2% government levy for adult social care, £1.23 more per week for a Band A home.

It faces a £7.4m overspend this year, £771,000 more than it forecast just two months ago. Most of this is from "unprecedented budget pressures" in children's services, £1.2m more than previously thought, with annual costs of more than £5m for just eight children.

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It proposes to use its reserves to fill the £7.4m gap, including £1.8m from a public health pot, but warns it must not only prevent overspending in future years but replenish the depleted funds too. The latest financial report says: "Using reserves to balance the budget means that remaining reserves are much lower than in previous years.

"It is vitally important that further in-year overspends are avoided. Given the level of reserves, and to improve the long-term financial resilience of the council, we will need to consider increasing reserves over the next few years."

In its longer-term planning, it is working to fill a £8.7m financial gap over the next few years. It says it needs to spend money to save money - to borrow more in the next few years to make services more efficient and lessen the impact of climate change.

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So it proposes to change £6m borrowing for children's services to a £20m "council-wide investment fund", which comes from borrowing, where cabinet-approved "invest to save" schemes could save money with capital spending.

'We continue to see increased costs'

The council will be asked to agree to borrow another £950,000 for improvements at Preston Park Museum and Grounds on track, after money which had been set aside was spent on drainage issues discovered during the build. It is also expecting to get £3.5m from charges to businesses producing plastics and recycling, meant to compensate councils for waste services.

The report says: "Inflationary pressures are having a significant impact upon the financial position in 2024/25. We continue to see increased costs in maintaining vital services."

It says it is already saving £4.6m by 2027 by finding new ways of working in the "Powering Our Futures" transformation programme, as well as £1m savings expected per year from measures to keep children in care in Stockton rather than sending them to expensive places outside the area, and £200,000 a year from increased fees and charges. This leaves £2.25m savings to find in the next two years, but more financial strain is expected.

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The report goes on: "The council, like many councils across the country, is continuing to see increased demand for children's and adults' care services, together with increased cost of provision, which continues to place a strain on resources. If this continues, there is a future risk of further financial pressures.

'£20m to support all service developments'

"It is important that the programme continues to focus on prevention and innovation to look to reduce demand and provide services in the most efficient manner. It is likely that to drive efficiencies, or to invest in measures to mitigate the impact of climate change, capital investment will be required.

"The current MTFP includes £6m previously approved to support children's services, funded by prudential borrowing, and it is recommended that this is increased to £20m to support all service developments which would deliver efficiencies.

"Investment will be required in further measures to reduce the council's carbon emissions and adapt to the impacts of climate change. Investments are likely to be required in relation to decarbonisation of our fleet vehicles, installation of additional photo-voltaic panels on council assets, retrofitting energy efficiency improvements for buildings, and measures to address the impact of climate change on our communities."

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The council is expecting rising costs including wages, children's social care, employer national insurance contributions, high inflation, grounds maintenance, vehicles, home to school transport, community safety officers and apprentices, and lower income from planning. But it has outlined more money coming in from government grants totalling almost £8m, and another £2m income expected from regeneration.

'High-spend areas'

The authority is still expecting to have a £2.4m budget gap in the next year. This will rise to a financial pressure of £6.5m in 2027-8.

Council leader Councillor Bob Cook said: "Despite the financial challenges we face, we are in a much stronger position than other councils up and down the country, thanks to our well-considered and carefully managed transformation programme. Our transformation programme has the clear aim of identifying high-spend areas where we can look at reducing costs, while also improving outcomes for our residents.

"There's a particular focus on children's services where we are looking at ways to bring children in our care back into the borough instead of paying for expensive placements. And in adult social care where we are working towards keeping people living independently in their own homes for longer.

"We're working hard to recruit more foster carers, and our Edge of Care Team are doing all they can to help children and young people stay with their families where it is safe to do so. Plus, new technology has helped improve the way we work in adult social care, for example we have piloted new activity monitoring technology which has improved the safety, health, and well-being of those who have used it.

"We're making excellent progress, already delivering over half the savings we need to achieve. The first of the new ways of working identified through the transformation programme have begun to be introduced over the last few months.

"We are already seeing those savings come through and these will continue to increase across the next two years. However, we know that demand in particular for children’s and adult services will continue to rise.

"This means we can't be complacent, and we must keep going with our transformation programme so we can make sure we continue to reshape to deliver our services within the budget we have available to us. And as always, our ambitions remain the same to deliver a bright future for everyone across the Stockton-on-Tees borough, which is such a great place to live, work and play."

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