Warning that Sunderland City Council’s £5.7MILLION emergency energy and inflation budget could be wiped out by March as energy costs double

The “special” reserve was created earlier this year by the Council in response to concerns over rising costs, but like many households across Sunderland, the scale of the rises, particularly in terms of energy, is taking its toll.

Cabinet Secretary Cllr Paul Stewart said: "The Council’s financial position, like households and businesses across the country, is being adversely impacted by inflationary and demand pressures and the legacy of Covid."While we continue with our City Plan for a more dynamic, healthy and vibrant Sunderland, we have seen our energy costs double in the last year. Further increases are expected and there’s significant uncertainty as we look to the next budget."

The Council is also trying to manage other rising costs, in particular the increased demand for adult social care which is currently the Council’s biggest “day-to-day” expenditure at around £184m, 24 per cent of this year's total services budget of £764m.

It’s a budgetary sector in which demands look set to increase with forecasts suggesting the number of older people aged 65 years and over in the city will rise from around 55,300 in 2020 to 69,500 by 2040, an increase of 26 per cent, while residents aged 85 years and over - those generally with the greatest care needs - is forecast to rise from around 6,300 in 2020 to 10,000, an increase of 59 per cent.

Cllr Stewart added: “The demand for adult social care continues to rise and the figures in the reports show in very stark terms the mounting pressures on this crucial and very necessary service."

Council budgets are already overstretched with the latest forecast overspend figure for this financial year projected to be £2.795m. Current forecasts worryingly highlight a funding gap of £21.4m for next year and over the next four year years a budget gap of £61m.

The city’s Council Tax, while still the lowest in the North East region, raises around 15 per cent of budget spending and to help meet inflation costs, the Council is anticipating having to levy a 2.99 per cent increase, one per cent of which is earmarked to help fund spiralling social care costs.

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Cllr Stewart said: "We are continuing to lobby Government, look at efficiencies, and work prudently, to see that residents get a fair deal and that crucial services are always protected.

"Nonetheless, there is this uncertainty as we look ahead and big questions remain over Government funding. Over the coming months we will be developing more detail about the next budget and consulting with residents and businesses."

An update on the emergency reserve and financial and budget planning reports are due to be heard at the next Cabinet meeting at 10am on Thursday October 13 in the City Hall.