Reductions in government funding are continuing to put pressure on council services in County Durham.
Councillors will hear about the ongoing impact of austerity when they meet next week to discuss Durham County Council’s budget for 2019/20 and the latest update to its Medium Term Financial Plan, which outlines the council’s financial position and spending priorities for the next four years.
The report details how government funding reductions and pressures on social care and other services, coupled with uncertainty about future funding allocations, mean the authority’s financial position is set to remain challenging for some time to come.
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 and will bring the total savings required since 2011 up to 2022/23 to £263 million.
The authority will see a £14.2 million reduction in Revenue Support Grant for 2019/20 – a 34 per cent decrease from 2018/19 which will mean that since 2010/11, the council will have lost 55 per cent of its government funding.
And funding could be further reduced if a proposed new methodology for calculating public health grant is introduced from 2020. This change would see the council facing a potential loss of £19 million – the biggest 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.
In December, the Government announced an additional £1 million in High Needs Dedicated Schools Grant for County Durham for 2019/20, £4.8 million for social care and £2.8 million for winter pressures as part of the Local Government Finance Settlement.
However, this is not nearly enough to cover shortfalls and the Government has offered no reassurances that any of this money will be available in the future.
The Government’s Fair Funding Review is casting further uncertainty over the level of funding that will be available for providing services in the future. The review could see the council’s 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.
Cllr Simon Henig, Leader of Durham County Council, said: “It is becoming more and more difficult to deliver the savings we need to make as Government funding cuts continue to bite.
“While the Government has announced some additional one-off funding for us, it is disappointing that it has not taken the opportunity to fully recognise the pressures facing local government, such as the current increased demand on children’s social care.
“Even more worrying for us in the longer-term are the proposed changes to the way funding is distributed as this could see us hit by further unprecedented reductions in funding and a redirection to more wealthy areas.
“The funding we receive for educating children with special needs is woefully short of what is needed and we are proposing, for the first time ever, to use almost £6 million of our general fund resources on a one-off basis to balance our budget for 2019/20. Government has to take action to address this chronic level of underfunding which is causing issues right across the country.
“It also cannot be right that public health funding in County Durham is moved to more wealthy areas of the country whose residents enjoy a longer life expectancy than we do in the north east. We are still dealing with complex health issues from our industrial past and it would be completely wrong to redistribute our public health funding to other areas of the country who have far less need for it.
“We have already made representations to the Government raising our concerns and, along with our partners, will continue to do so during the Fair Funding review process.
Councillors will be asked to agree 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 a 97p per week increase for the majority of council tax payers, who live in Band A properties.
Cllr Alan Napier, Deputy Leader of the Council and Cabinet member for finance, said: “We are seeing a clear pattern from the government of redistributing government funding to more wealthy areas while they expect people in areas such as ours to pay more for services through council tax. We have at least managed to retain our support for the most vulnerable through our council tax support scheme which helps those on the lowest incomes with their council tax bills – we are the only council in the north east to retain the scheme in its original form despite cuts being made by central government.”