SUNDERLAND City Council leader Paul Watson has said the authority is “teetering on the brink” and that’s despite receiving an extra £234,000 to help balance the books.
Sunderland’s finance chiefs today revealed the extra Government funding announced this week was less than £250,000 – a fraction of the £39.5million grant cuts facing the council.
Local Government Minister Bob Neill announced a series of minor amendments to provisional budget settlements on Monday, with Sunderland – which has a total spending budget of more than £700million – named as one of seven councils to get an extra “transitional grant.”
Coun Watson said the extra cash was “de minimis – but very welcome” as the authority finalises what has been its tightest budget in years.
He said: “We were going to be losing £39.5million and now we’re losing £39.24million. It’s de minimis but it’s very welcome.
“If we can give it to struggling community projects and organisations in the voluntary sector, it would make a big difference to individual projects or good causes.”
The council will publish its budget in about a fortnight, ahead of a council meeting to approve the document on March 2.
Senior Labour councillors and officers have vowed to avoid compulsory redundancies and are instead trying to redeploy or retrain staff.
They say the authority has been planning for budget cuts since the credit crunch first began to bite, as they were expecting public sector funding to take a hit.
Coun Watson, however, admitted he was concerned about the level of cuts facing the council’s coffers.
He said: “I really do feel we’re teetering on the brink with the level of cuts over the next four years. Unless we get some sort of mitigation we’re certainly going to find it difficult.”
Coun Watson said the Coalition Government had vowed no council would lose more than 8.9 per cent of its spending power, and Sunderland’s settlement led to an 8.88 per cent drop.
He explained the Government had since dropped the threshold to 8.8 per cent, allowing it access to extra funding.
Mr Neill published the final Local Government Finance Settlement for 2011/12 on Monday. To address concerns about the impact on front-line services of council spending cuts, he revealed a series of minor amendments to the provisional settlement announced in December.
The six other councils to get extra cash are Aylesbury Vale, Babergh, Bradford, Mansfield, Rossendale and Salford.
Chancellor George Osborne announced a 27 per cent, front-loaded, four-year cut to Whitehall grants to councils in his spending review last October.
After councils worst affected by the cuts voiced their concerns, however, Local Government Secretary Eric Pickles found an extra £85million to ease the burden on thm.
After this week’s rejig, the total transitional funding now made available to councils has reached £96million.
Mr Neill said: “We urgently need to reduce the country’s public spending and Local Government accounts for around a quarter of all public expenditure, so councils have a big part to play.
“We have listened to views and looked hard at the figures and have pushed more money to those most dependent on grant so now no council will face a reduction of more than 8.8 per cent.
“These extra steps once again show we have worked to deliver a fair and progressive approach that directs grant to where it is most needed – the vulnerable and needy – whilst protecting taxpayers.”
Mr Pickles added: “This goes hand in hand with the new localism powers and spending freedoms we are handing councils so they can be as efficient and effective as possible with public funds, rooting out waste and focusing on frontline public services.”