Durham County Council reveals ‘enormous’ cost pressures
Durham County Council revealed a £45.5 million budget gap as part of its financial planning despite council tax and government funding increases.
Council tax bills are set to increase by 4.99 per cent across the region to help raise additional funds – but pressures continue.
Cabinet members were told on Wednesday the council expects to receive £48.8 million in additional government funding and can raise a further £19.498 million through council tax and local business rates – however, it is facing additional unavoidable costs and budget pressures of £89.550 million which significantly exceed the extra revenue funding.
It means there is still a funding shortfall of £21.227 million in 2025/26. More than £18 million worth of savings are set to be made, but frontline services are said to be unaffected.
Councillor Richard Bell, cabinet member for finance, said: “The cost pressures we face next year are enormous.
“While the local government finance settlement provided us with some much-needed funding through the recovery grant, the cost pressures we face continue to outstrip our local tax-raising capacity.
“While our financial resilience has reduced in recent years, we are still in a stronger position than many other councils. That said, we cannot be complacent in this regard and we must continue to act prudently.”
The additional government grant includes an increase in the Social Care Grant of nearly £12 million next year, provided to help meet the increased costs of children and adult social care. However, this will cover only 35 per cent of the £34.486 million of unavoidable cost pressures the council faces for social care provision.
Council Leader Amanda Hopgood continued the local authority’s campaign for a better funding settlement. “The system is broken and in need of urgent reform,” the Liberal Democrat warned.
She added: “If councils like ourselves are to survive and thrive going forward, our only hope is the government sees through on its commitment to change the distribution mechanism, placing greater emphasis on council tax equalisation and on deprivation, which would benefit us.
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“Increasing the council tax is a decision that should not be taken lightly, and we must recognise the squeeze on the cost of living for our most vulnerable residents. However, not increasing the council tax is simply not a sustainable or prudent strategy to adopt and would not be in line with the government’s expectations.”
People on low incomes, unemployed, or retired are currently eligible for Durham County Council’s reduction scheme, meaning they pay less for their bills.
The agreed budget and Medium Term Financial Plan will be presented to a full council meeting for approval on Wednesday (February 19).