Job cuts, more digital services and a £5 tax hike will help a council plug its £1.275 million budget gap next year.
Newcastle Borough Council has published its draft budget proposals for 2021/22, with around half the savings – £599,000 – set to come from ‘staffing-related efficiencies’, such as teams being restructured and vacant posts being deleted, although leaders insist there will be no redundancies.
A council tax increase equating to an extra £5 a year for a Band D property is expected to raise an additional £187,000.
And improving efficiency through the greater use of digital technologies will save another £195,000.
Cabinet members will discuss the draft budget at their meeting this afternoon, ahead of the proposals going out to consultation.
The report to cabinet says that the budget gap in 2020/21 would have been £1.79 million, if it was not for a number of measures recently announced by Chancellor Rishi Sunak in his spending review.
A public-sector pay freeze for workers earning more than £24,000 will save the borough council £377,000 next year.
And a government scheme to compensate authorities for council tax and business rates income lost due to Covid-19 will provide £133,000.
Council leader Simon Tagg says the proposed staffing efficiencies will include measures such as some workers being offered early retirement, with the council retaining its ‘no redundancies’ policy.
He believes the council is in a better financial situation than might otherwise have been the case thanks to the government support.
Mr Tagg said: “The government has really helped us through the Covid crisis, by providing us with emergency funding to make up the shortfall we have seen in income from services such as car parking.
“The situation is still challenging, as it always is. But the gap we’re facing is the smallest it’s been at this point in the year in all the time I have been leader.”
The cabinet report also sets out how the council is planning a major overhaul of the organisation over the coming years to address issues raised during the pandemic.
Changes to the council’s structure, processes and technology are set to deliver around £922,000 in revenue savings over a three-year period. Implementing the ‘One Council’ revamp will cost £1 million.
The report states: “As a result of the Covid-19 pandemic and the financial challenge the pandemic has raised, the council has commissioned a full organisational review. This has identified a requirement to make significant changes to the way council services are delivered, recognising both the impact of the pandemic in terms of creating more and different demands on council services and the need to retain focus on the most vulnerable and disadvantaged in the community, while maximising opportunities for residents to help themselves, ensuring that they have a consistent and efficient interaction with the council when needed.
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“A major programme of work (the One Council Programme) will be undertaken over the period 2021/22 to 2022/23 to implement the necessary changes, which will involve extensive redesign of organisational structures, processes and technology, underpinned by changes in culture, leadership and governance.”
The savings proposed in the draft budget include:
- Vacant posts, service re-prioritisation and employees’ retirement – £255,000;
- Phase two of the restructure of revenues and benefits and customer services – £131,000;
- Efficiencies to be generated from the continuation of prioritising digital deliver processes and services – £195,000;
- Increased income from the trade waste service – £50,000;
- Restructure of the recycling and fleet managerial team – £40,000;
- Savings from the grounds maintenance service being brought back in-house – £60,000;
Mike Stubbs, the leader of the opposition Labour group, believes central government should be providing more support to local authorities during the Covid-19 crisis so they do not have to make further cuts.
He said: “The government told councils to spend whatever they needed to do to deal with the pandemic. But now it’s clear that they aren’t willing to give councils the support they need.
“These budget proposals are a direct result of that. The council is proposing cuts across the board.
“I lay the blame for this squarely at central government, rather than at the council.”