Councillors support budget deficit strategy

Published Tuesday, 14th September 2021

Councillors have supported a proposed strategy to tackle the £11.4m budget deficit facing Hartlepool Borough Council over the next three years.

The Finance and Policy Committee voted in favour of annual Council Tax increases in line with national referendum limits in 2022/23, 2023/24 and 2024/25.

Final decisions on Council Tax levels will be taken by Full Council, but the committee is recommending a rise of 1.9% (subject to confirmation of a 2% referendum limit) and a 3% increase in the Adult Social Care Precept for 2022/23. (The precept was deferred from 2021/22 as councils had flexibility to implement it either this year or next. Most implemented the precept increase in the current year as average Council Tax increased nationally by 4.4%, but Hartlepool councillors opted for a freeze.)

The committee is also recommending indicative Council Tax rises of 1.9% for 2023/24 and 2024/25.

National funding changes over recent years have seen the burden of funding for local services shift from national grant to Council Tax. In the current financial year, 53% (£42.7m) of Hartlepool Borough Council’s recurring income is coming from Council Tax, compared to 32% (£30.8m) in 2013/14. Over the same period, general grant funding has decreased from 53% (£50.7m) to 24% (£19.1m).

The proposed increases in Council Tax will generate recurring income that will reduce the deficit to £7.5m.

The alternative would be to address all of the deficit by cutting services.

The Council now intends to develop a Transformation and Savings Plan that will enable it to take a phased, three-year approach to tackling the deficit.

Although councillors voiced concerns over the impact of Council Tax increases on local residents, Councillor Shane Moore, Leader of the Council and Chair of the Finance and Policy Committee, said the authority had little choice.

“Whilst £7.5 million worth of budget cuts are neither great nor palatable, they have got to be better than the devastation that £11.4m worth of cuts would bring to this town,” he said.

The Council recently sent a letter to Secretary of State for Housing, Communities and Local Government Robert Jenrick calling for an overhaul of the Council Tax system and a fairer funding deal, and the committee agreed to approach Hartlepool MP Jill Mortimer to seek her support for their campaign.