Council tax set to rise by almost 5% in Sunderland as city leaders aim to balance the books during covid pandemic

Sunderland City Council has set out its budget plans for 2021/22 to fund day-to-day services and longer-term investment plans.

But senior councillors say a tight financial settlement from the Government and the impacts of the covid pandemic mean they have no choice but to raise council tax bills for people in the city, as well as dipping into reserves.

The rise is comprised of a 3% increase earmarked for funding adult social care, and a further 1.99% hike in core council tax.

Senior councillors on Sunderland’s ruling cabinet are due to approve the rise at a meeting on February 9, before a vote of all councillors on March 3.

Deputy council leader Councillor Paul Stewart said the council tax rise was needed to prevent further cuts to services and minimise the amount the authority drew from its reserves.

"Unfortunately, the Government continues to expect and direct that residents will make a bigger contribution each year through the council tax. This does not address longer-term issues of grants and funding being cut for our services and residents,” he said.

“We are continuing to face significant pressures as a result of reduced Government funding, inflation on our costs and increasing demand for our services. The challenge is even greater now as we all deal with the impact of Covid-19.

"Even with these measures and extra income from the proposed tax increase, the revenue budget will still not be balanced. This requires us to use approximately £2.2million of financial reserves to balance our books next year."

He said the proposals would mean the majority of Sunderland households would be paying less than £1 a week extra next year towards city services.

Cllr Stewart said funding, however, would be made available to prevent council tax bills becoming a strain on the poorest households in Sunderland under the plans.

The council is extending the Local Council Tax Support scheme, which will see eligible households get up to £150 off their bills.

Cllr Stewart said current estimates are that around 16,500 working-age claimants will pay no council tax in relation to next year.

And another £1million would be made available from council resources for residents who may need further help during the pandemic, on top of other help already available.

He said demand for adult social care continues to grow, and the 3% rise to fund services in this area was expected to raise around £3million.

For 2020/21 the council’s adult social care budget was £157million and it is the biggest part of the council’s day-to-day spending at 23%.

Cllr Stewart said a major investment programme to bring in more new homes, improve infrastructure, and promote economic growth is also part of the budget, and the ongoing City Plan for a dynamic, healthy and vibrant Sunderland.

The police and fire authorities may further add to the rise in council tax bills when they put forward their “precepts”.

The cabinet meeting on February 9 will be held remotely, and can be viewed on the council's YouTube channel.