Gateshead Council is facing a budget deficit of £47.4 million over the next five years, with the leader warning that closing the gap will require “difficult decisions”.
Financial shortfall details
Latest figures predict the council will need to address a shortfall of more than £47 million by 2032. A report presented to the council’s cabinet on Tuesday noted that while Gateshead is not in the position of other authorities that have required exceptional financial support from the Government, the challenges posed by rising costs and demand for services “should not be underestimated”.
The report estimates the budget shortfall could be reduced to £32.5 million through assumed “positive interventions to manage demand and cost pressures” in social care services. However, the predictions also assume the council would impose the maximum permitted council tax rise of 4.99% in each of the next five years.
Leader's warning
Local Reform UK leader Nick Allan, whose party won power in Gateshead this May to end decades of Labour rule, told colleagues this week that finding ways to close the gap was “not going to be pleasant”. He said the “most difficult decisions” for the council would likely come between now and 2030.
Coun Allan added: “We remain in a good position in relation to many other councils in terms of stability and the strength of our finances. We have reasonably healthy reserves, but a structural challenge of nearly £50 million over the next five years.”
Next steps
Darren Collins, the council’s strategic director of resources, told Tuesday’s Civic Centre meeting that there is an £11.6 million budget gap for the next financial year. Proposals for next year’s council tax setting, any budget-cutting measures, or spending of reserves are expected to be revealed over the coming months.
Coun Allan said: “The devil is in the detail. We are in the early stages and this is not going to be pleasant. But we need to work together to produce the best possible outcome for the people of Gateshead.”
