Councillors in County Durham have today (Wednesday, 20 February) committed to additional capital investment of £74 million bringing the total investment between 2018 and 2022 to £391 million.
The cash, which is ring-fenced for capital projects and has a clear focus on regeneration and growth across County Durham, was agreed by elected members as part of Durham County Council’s Medium Term Financial Plan (MTFP), which outlines the council’s financial position and sets out its budget for the next four years.
The capital programme is mainly financed from government grants, capital receipts and prudent borrowing.
The multi-million pound investment programme includes details of a £2.4 million capital budget over the next two years for the county’s towns and villages. This capital investment will be supplemented by further earmarked revenue funding of £7.6 million – bringing the total available for town and village projects to £10 million.
Investment in the highways network is set to continue with an additional investment of £17.5 million, including £5 million additional funding from the council to supplement government funding which is not on its own sufficient to meet the required need.
A further £6.6 million has been approved for 2020/21 towards a project that will see the creation of a Durham history centre bringing together archive and heritage services for the county.
Other projects set to benefit include the Finance Durham Fund, which will receive £2.75 million to provide loans and equity to help County Durham businesses grow and prosper. This brings the total investment from the fund to £10 million to date.
In addition, almost £2 million will be used to extend Escomb Primary School in order to meet expected increased demand created by new housing developments in Bishop Auckland.
Cllr Simon Henig, Leader of Durham County Council, said: “Continuing austerity means that we are going to have to manage significant financial pressures for the foreseeable future. However, it is vital that we continue to invest in capital infrastructure if we are to grow our local economy.
“Additional investment will not only improve infrastructure but will help us retain existing jobs and create new ones as well as ensuring that key council services are maintained.”
As a result of continued government funding reductions, pressures on social care and other services and uncertainty about future funding allocations, the council needs to make further forecasted savings from its revenue budget of £39.5 million over the next four years. This includes a savings requirement of £15.8 million for 2019/20 while the total savings estimated between 2010/11 to 2022/23 now stands at £263 million.
Cllr Henig added: “We continue to work hard to protect frontline services but as the financial pressures on the council increase this is becoming more and more difficult. Not only are we having to deal with cuts to our funding but we are now facing uncertainty caused by proposed changes to the way local government is funded.”
The MTFP highlights a £14.2 million reduction in Revenue Support Grant for 2019/20, which is a 34 per cent decrease from 2018/19. Since 2010/11, the council will have lost 55 per cent of its core government funding.
Funding will be further reduced if a proposed new methodology for calculating public health grant is introduced from 2020. The change would see the council facing a potential loss of £19 million – the largest reduction in the country.
These reductions are compounded by increased pressure on specific services where the authority is struggling to cover costs such as children’s social care and special educational needs support, with additional demands in these areas forecast to be more than £12 million in 2019/20.
The council has agreed to provide £5.5 million from its reserves in a bid to meet demand but this approach is not sustainable in the long-term.
Sally Green, Chair of County Durham Schools Forum, said: “We know that school budgets in general and high needs budgets in particular are really under pressure across County Durham and in other areas. We welcome this additional support from the council and will continue to work with them to lobby for additional government funding and do what we can to make this funding as sustainable as possible.”
The Government’s Fair Funding Review is casting further uncertainty over the level of funding that will be available to provide services in the future. The review could see funding moved to more prosperous areas of the country if a proposed new formula fails to properly take account of need and the real drivers of cost in local areas.
At today’s meeting, councillors also agreed a 2.99 per cent increase in Band D council tax for 2019/20 with an additional 2 per cent increase to the Adult Social Care Precept. This equates to a £1.45 per week rise for Band D properties and 97p per week increase for the majority of council tax payers, who live in Band A properties.