Newcastle City Council has unveiled plans to raise council tax by 4.99% next year and cut more than 300 jobs as part of measures to address a deficit exceeding £47 million by 2030.
Council tax increase and savings target
The authority intends to increase council tax bills across the city by 4.99% from next April, the maximum rise permitted without a referendum. A report warns that failing to apply the maximum increase would add a further £26.7 million to the shortfall over the next three years, as the council faces rising demand for services and higher costs.
The draft budget plans, due to be considered by councillors next week, would result in the loss of the equivalent of 307.6 full-time council workers by the end of 2027/28, including approximately 113 posts removed during the current financial year. The council is running a "Change and Innovation programme" of modernisation, which includes increasing the use of artificial intelligence and reducing duplication of work, to save money.
Reserves and leadership response
The council also plans to spend £4 million of its reserves to balance the books next year, a move finance chiefs warn is "not sustainable" in the long term. City council leader Colin Ferguson said his minority Liberal Democrat administration had "little other choice" but to propose the 4.99% council tax uplift.
Calling for reform of the council tax system, he added: "But any system that sees households living in deprivation paying more than millionaires in some of London's most affluent areas is fundamentally broken. We will continue to fight for a fairer funding formula for our residents while delivering the change we promised when we were elected."
Job losses and cost pressures
Regarding the job losses, the council said it was "seeking to minimise compulsory redundancies as far as possible" by deleting vacant posts and offering voluntary severance. It must make £12.7 million worth of savings in 2027/28, followed by £13.5 million in 2028/29, and £21.2 million in 2029/30.
The report highlights cost pressures from inflation and rising demand for frontline services, especially adult social care needs from an ageing population and an increase in people living with complex needs. It also pledges £1 million for a Neighbourhood Task Force to tackle issues like weed killing and grass cutting, and repeats a pledge to invest £50 million in filling potholes over 10 years.
Coun Ferguson added: "This is a time of opportunity for Newcastle, with an increased profile on the international stage, major regeneration and investment plans underway and the most devolved power and autonomy our region has ever seen from national government. Our council must be financially strong to capitalise on these opportunities and drive our city's sustainable growth development."
"Pressures on council finances are no secret, but we will not reach for the quickest cuts because they make a spreadsheet balance today. We will not repeat the mistake of chasing headlines for a sugar rush today, only to have to deal with the crash tomorrow, as we've seen elsewhere."
"Our priority is to protect and invest in the services residents see through their front window by ensuring we are a leaner and more efficient council, delivering a better deal with residents for the long term. That means being ambitious about transformation. We will challenge every part of the council to work smarter and make the best possible use of taxpayers' money."
"But genuine transformation takes time. We want to move at pace, but we also want to get it right and I want to thank officers for their hard work in delivering on that ambition."
A public consultation on the budget plans is expected to launch next week and run until December 29, before the proposals are formally agreed in the new year.
