Sunderland households facing higher council tax rises as covid hits finances

Long term spending plans drawn up by city leaders had predicted further rises to annual bills for households in 2021/22.

But the fallout from the coronavirus pandemic combined policies announced in the government’s latest spending review could see the previously mooted 2 per cent increase more than double.

Graeme Miller, the leader of Sunderland City Council, said: “We had always expected to increase council tax in our budget.

“The two per cent in our plans was based on the expected level the government would include in its funding calculations.

“Last week we found out that the Government now expected a higher increase – of up to five per cent.

“A further increase is a very difficult decision.

“If we don’t do this, we will have to balance our budget in other ways.”

This year’s (2020/21) council tax bill for a band A, the lowest band, property in Wearside currently stands at £1,127.37, with a further supplement of £9.64 added for households in Hetton.

The vast majority of this – £980.06 – goes to the city council, with the remainder going to fund the Tyne and Wear Fire and Rescue Service and the Northumbria Police and Crime Commissioner.

Bills would be even larger for homes in higher bands.

City leaders had expected to raise their own portion of the yearly bill by 2% this year.

But last week’s government Spending Review confirmed ministers expect local authorities to increase this by at 4.5% and have changed the rules to allow them to do this.

As well as the maximum 2% rise usually allowed, councils will be able to add a further 3% specifically to fund social care.

Wearside’s bosses had planned a raid on savings worth more than £8million to fund services next year, but a report for councillors admits the extra 3% rise could allow this to be reduced.

But problems remain, not least the prospect of cuts worth £6.3million, financial uncertainty beyond 2022 and the impact of the COVID-19 pandemic.

“We face a dilemma,” Cllr Miller added.

“If we don’t increase council tax at the rate that the Government assumes, we will lose out on the income that we need to deliver high quality services to everyone in Sunderland.”

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