The black hole in Durham County Council’s budget has grown by £11.1mn in the past two months under the control of Reform UK, and its cabinet has been forced to approve a £10mn list of proposed cuts, including in staff numbers, and increases in charges.
But the measures will still leave the county council with a deficit of £72mn over the coming four years unless councillors agree more cuts or council tax increases or use of reserves or a combination of the three. Without the £10m cuts now being proposed the four-year deficit would be £82.1mn.
The council says it is under pressure from inflation and the cost of children’s social care, school transport, homelessness and special educational needs and disability in particular.
Councillor Darren Grimes, deputy leader of the council, said at a meeting of the cabinet during discussion of the four-year Medium-Term Financial Plan (MTFP) that the figures were depressing and “no joke”.
Durham’s cabinet was presented with figures in September, as reported by NEB at the time, revealing a black hole of £71mn by the end of the MTFP if cuts were not made, council tax not raised and reserves not used. This week’s cabinet meeting approved £10mn cuts – for consultation, but in substance almost certain to go ahead – but they have already been swallowed up by more cost rises.
The proposed savings, which will be spread over the MTFP period are in addition to £5.6mn approved by the former Liberal Democrat-led council in February. £9.1mn of the new savings will come in 2026-27.
Even with the new savings, warns a report by Councillor Grimes and Paul Darby, corporate director of resources, a significant budget deficit remains: “Cabinet will therefore carefully need to consider options to raise council tax, find further financial savings and/or consider the use of reserves as a temporary measure to help balance the budget next year.” The council has £34.5mn reserves, but councillors have been warned that authorities that have placed an over-reliance on reserves and avoided making difficult choices around savings and council tax have gotten (sic) themselves very quickly into financial distress.
An annual council tax rise of 2% earmarked for social care or 3% in the core council tax would still require savings of £34.8mn or £47.4mn, equivalent to staff cuts of 900 or 1,200 respectively. Even with a full 5% rise there would be a deficit of £10.6mn over the MTFP period.
According to a cabinet report by Darby and Grimes: “Options to increase council tax must be given serious consideration, and particularly the option to increase council tax by the maximum 5% per annum. Even with this level of increase, it will be important to consider and develop a further suite of transformational savings and additional budget savings to help balance the budget across the coming years.”
The cuts and charges
The savings agreed for consultation by the cabinet this week (November 19) will affect virtually every council service and all sections of the population. They include the loss of 88 full-time equivalent (FTE) posts, about one-third of which are currently vacant. Overall, the largest savings are in neighbourhoods and environment services (£3.4mn), health and adult services (£2.6mn), resources (mostly staffing) (£1.6mn) and regeneration, economy and growth (£1mn).
Among specific savings: increased parking charges will bring in £525,000 in Durham City and towns around the county and a 40% rise in resident and visitor parking permits will bring in £40,000. School crossing patrols (hard to fill anyway, says the council) will be reduced, saving £80,000. Pensioners will have to pay £1 instead of 50p to travel before 9.30am, to be phased in over two years. Bus routes 35A and 104, said to be under-used and unviable, will be withdrawn, saving £84,000 in 2026/27 and £117,000 in 2027/.28. Utilities will be charged for carrying our roadworks on busy routes, bringing in £310,000 next year.
The culture, sport and tourism services will be restructured, axing 4.5 FTE jobs and saving £225,000. Business Durham will increase its rents on commercial properties, raising £250,000 over four years.
Funding for the Care Connect service, which provides emergency home alarm and telecare services to around 10,000 clients is to be “realigned”, saving £400,000, pending a review. A vacant managerial post in building safety and housing standards will be axed, saving £43,000. Business support will be cut by £634,000, losing 18.7 FTE staff. Axing grants to town and parish councils will save £750,000.
The frequency of spraying weeds on footpaths across the county will be reduced, saving £121,000. A reduction in summer bedding will save £50,000, grass cutting £96,000, litter picking £193,000, parks and countryside staff, saving £44,000, and playground inspections £17,000. Crematorium charges will be increased, raising £88,000.
Comment
Councillor Grimes is not wrong to blame underfunding and cost pressures beyond the council’s control, such as children’s social care, for Durham’s financial predicament. The North East’s Labour councils have been saying the same thing for years. Reform is now learning that running a big council is not as easy as it probably thought.
*The full list of proposed savings can be found in Appendix 3 of the cabinet report here.
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