County Durham faces ‘stark’ choice between tax rises or cuts

Durham County Council faces a £20 million deficit next year without increasing bills or making cuts. 

Continued financial pressure on the local authority means the Government’s current finance system is insufficient and unable to cover social care costs, Reform leader Andrew Husband said.

Without additional funding, the council warned it could be forced to cut vital local services. 

Cllr Husband urged the Government to rethink its Local Government Fair Funding Review 2.0 due to the disproportionate burden on council taxpayers. 

“In County Durham, we provide services to some of the most deprived communities in the country, and this review completely fails to recognise the extreme financial challenges we face to cover rising social care costs that are out of our control,” he said. 

Under the proposed new funding system,  a new set of formulae will be introduced to determine each council’s funding needs. Grant funding allocated to Durham County Council is set to increase, but it will not cover the significant pressures in adult and children’s social care. 

Cross-party councillors and previous administrations have repeatedly criticised the Government’s funding policy and campaigned for improvements. 

Cllr Husband also said the current proposals mean councils like Durham will have to pay for services in more affluent areas. 

He said: “This is perpetuating the inherent unfairness of the current arrangements and effectively means that County Durham council taxpayers would be footing the bill for services in areas that do not face the same challenges as we do.

The Chester-le-Street North councillor also called for funding to be allocated immediately, instead of being spread out over three years. 

“If you live in County Durham, please be assured that we will continue to fight for funding reforms that are truly fair and that more adequately reflect the demands and cost pressures we face due to our relatively higher levels of deprivation and our low council tax raising capacity in comparison to other areas.

“If that additional funding is not forthcoming, then we will need to make some pretty stark choices between council tax increases and cuts to vital local services – services our residents rely on.”

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The council’s Cabinet will consider an updated forecast of its budget position and Medium Term Financial Planning forecasts on September 17.

A Ministry for Housing, Communities and Local Government spokesperson said: “The current, outdated way in which local authorities are funded has left communities behind and damaged local services.

“This must change and is why we are taking decisive action as part of our Plan for Change to reform the funding system so we can improve public services, while maintaining the previous government’s referendum threshold on council tax rises so taxpayers have the final say and are protected from excessive increases.”