A council tax rise, job cuts and a sale of local authority assets in North Tyneside may be required to cope with a major cash shortfall totalling more than £30 million.
Bosses at North Tyneside Council have warned that they are faced with a major financial challenge next year due to “unprecedented” pressures, particularly in demand for social care services and the cost of supporting looked-after children.
Initial proposals to deal with a predicted deficit of £31.7 million in 2026/27 are due to be presented to councillors later this month.
Initial proposal
They include another council tax rise of 4.99%, including a 2% adult social care precept, the maximum increase allowed without the need for a referendum.
A report published ahead of a meeting of the authority’s Labour-run cabinet also warns that more redundancies may be needed at the council, following the announcement of plans to slash 200 jobs this time last year.
The council is also proposing a review of its buildings to decide “whether we need them all and if we can generate savings and capital receipts by selling assets we no longer need” and has already confirmed a move to increase its charge for garden waste bin collections by £5 in 2026.
Finance chiefs’ report also outlines a need to make special educational needs and disabilities (SEND) services “more cost effective” and to open more children’s homes, in order to reduce the council’s reliance on paying for external placements for children in care.
In the current financial year, the council is currently projecting a budget overspend of almost £10 million.
Even when taking into account the latest savings plans and council tax rise, there remains a £2.9 million gap in its budget for next year – and a cumulative pressure of £29 million by 2030.
While the council says that the looming overspend would require it to dip into its financial reserves, that solution “cannot continually be relied upon” to cover shortfalls in future years.
Jon Ritchie comment
Jon Ritchie, North Tyneside Council’s director of finance, added: “This plan shows how we’re continuing to manage public money responsibly in very difficult circumstances.
“Like many councils, we’re experiencing unprecedented pressure on many of our services, especially social care, where case numbers, complexity and costs have increased at a higher rate than the funding we receive.
“But we are taking a proactive approach — protecting key services, investing where it matters most, and working to keep our finances sustainable for the future.
“The decisions we make aren’t always easy, but we are an organisation that listens and cares, and the decisions we make are shaped by what local people tell us are the most important issues for them.”
Final budget proposals are expected to be confirmed in the new year and finalised in February, following a public consultation.
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