Leader's worry as Sunderland City Council sets budget amid gloomy times

The top man at Sunderland City Council has admitted worries for the future as city leaders again try to balance the books amid gloomy times.

Senior councillors on Sunderland's ruling Labour cabinet will meet next week, on Thursday, January 18, to discuss the latest on plans for the council's budget spending for up to 2028.

They will consider the Local Government Settlement for 2024/25, which is the funding from Central Government to help support services such as social care and education.

Sunderland’s core spending power grant is rising by 6.7% from £318million to £340million.

However, council chiefs say half the spending increase is assumed by Government to come from raising council tax by 4.99% and extra funding is not keeping up with demand and cost pressures.

They said Sunderland's spending on adult and children's social care and homelessness services is already earmarked to rise for the next budget and over the medium term, adding all three service areas are experiencing rising demand and major cost pressures.

Leader of Sunderland City Council, Councillor Graeme Miller said: "In November, we wrote - that's the three main political parties here on the council - to the Chancellor of the Exchequer about how Sunderland along with other councils was experiencing unprecedented pressures of increasing demand and costs for services to vulnerable people of all ages.

"This was in social care, special needs education, and services for the homeless and those at risk of homelessness.

"We asked for a fairer funding model and we’re still waiting for that as inflation and demand pressures are eating into the funding we receive from Government.

"What the Government has allowed councils to do is to raise more funding through council tax increases.

"As an area with a large proportion of A and B band properties, Sunderland does not have the revenue raising powers of areas like Chelsea and Kensington. We are looking to balance our budget by using £9million of reserves and making more savings.

"Plus, as with so many councils across the country, the worry remains that once reserves are gone and the room for savings continues to become smaller and smaller we have to make more difficult decisions.

"Since 2010, Sunderland has lost more than a quarter of its core spending power (26 per cent) and yet the pressures for supporting and helping the vulnerable in our communities continue to increase."

To help balance the next budget, the council is ready to use £9million of reserves and introduce £6.7million of savings and efficiencies.

The savings proposals are anticipated to include staffing reviews where vacant posts are not filled, plus reviews of fees and charges, and reductions in some service expenditure.

Planning for the budget is already anticipating a council tax increase of 4.99%.

The council said this is in line with Government assumptions and is composed of 2.99% for helping fund day-to-day services and two per cent for the Social Care Precept that helps fund services for vulnerable people.

The majority of the council's day-to-day services are financed by Government grants.

This year's gross expenditure budget is £759.8million including 26% of that sum - £201million - going towards adult social care.

Ten years ago the adult social care budget was £114.8million, and 17% of the council’s gross expenditure budget.

The 2023 Sunderland council tax increase was 2.99% and less than the Government’s assumption that councils could raise it by 4.99%.

Cllr Miller said Sunderland's council tax, which helps finance around £16 for every £100 in the services budget, is the lowest in the North East region.