Preparations to tackle £26million financial black hole at Sunderland City Council

The forecasts are part of an update to the city council’s cabinet next week as the local authority prepares its spending plans for 2022/23.

According to a report prepared for the panel, the council is facing a funding gap of around £25.769million for spending on day-to-day services in the next financial year.

And over the next four financial years – 2022/2023 to 2025/26 – total savings of £56.747million need to be identified.

Earlier this year, the city council agreed a total annual budget of more than £700million for its daily revenue spending, with nearly one-in-four pounds of the budget being used for adult social care.

The council is now awaiting further details about funding to meet the costs of rising demand for adult social care services in 2022/2023 and beyond, following recent government announcements on the health and social care sector.

Consultation with residents and businesses will begin later this month about Sunderland City Council’s 2022/23 budget.

It is currently anticipated that the government will assume councils increasing council tax to help meet the cost of services including social care, and that precept increases for fire and police services are also likely.

Although Sunderland has the lowest council tax bill in the North East, bills increased by 4.99% earlier this year, in line with Government assumptions.

Councillor Paul Stewart, Sunderland City Council’s cabinet secretary, said the financial struggles were set against a backdrop of years of funding cuts to councils.

"The scale of the current funding gap lays bare the chronic underfunding of local government after more than a decade of cuts by this Government,” he said.

“Proposals are being developed, which will be considered over the next few months as we prepare the next city council budget.

“However, it is recognised that given the size of the [budget] gap, the uncertainty with regard to the pandemic recovery and government funding, that earmarked reserves will be required to support the budget.”

Cllr Stewart added: “Our budget planning is based on the best information available at this time.

“There remains the risk that the city council will lose out under the fair funding review once implemented but planning assumptions are currently that any changes will be financially neutral.

“Even with these pressures, which are being faced by councils across the country, we are striving to make Sunderland a great place for our residents, businesses and visitors.

“Our City Plan ambitions are being delivered, with a significant capital programme already in place of over £600 million.

“In the last couple of weeks alone, we have had some fantastic successes, such as the battery plant investment at IAMP, the creation of 1,500 jobs at Rainton Bridge and being named Digital Council of the Year.”

Sunderland City Council’s next cabinet meeting will take place on Tuesday, October 12 at Sunderland Civic Centre.

The meeting starts at 10am and will be held in the council chamber.

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