Increase in spending power branded ‘a magician’s trick’
A predicted increase in core spending power for Sunderland City Council has been slammed by a council chief as a “magician’s trick” from the Government.
The provisional local government finance settlement was recently announced by Central Government, setting out the amount of cash councils in England should expect in 2021/22.
As part of this, a core spending power calculation measures the core revenue funding available for local authority services.
Despite a 4.55% predicted increase in Sunderland, compared to an average core spending power increase of 4.51% nationally, council chiefs say this is based on the assumption that council tax will rise by the maximum allowable.
For 2021/22 this is set at 5%, split between core council tax and a 3% precept for adult social care.
During a budget planning update at a recent meeting of Sunderland City Council’s cabinet, deputy council leader, Cllr Paul Stewart, branded the assumed council tax increases as a “disgrace”.
While welcoming the expected increase in core spending power in Sunderland, he said the majority of funding was a “simple reallocation” of funding previously provided through the New Homes Bonus with “little new money coming to this city”.
“I don’t generally get quite angry but I am angry that
once again [Central Government] are underfunding local government, deliberately underfunding local government at a time of need,” Cllr Stewart said.
“In particular with regards to adult social care, the ongoing pressures there is a national issue, yet they’re placing the burden on the local taxpayer.”
Cllr Stewart called on the Government to “fully fund local government and stop hiding behind the magician’s trick of increases in
core spending power”.
“All that does is lay a cost on the local taxpayer,” he added.
Sunderland City Council’s 2021/22 budget will become clearer when the final local government finance settlement and details on various grants are confirmed.
Even with the assumed council tax increase, city leaders have said they still can’t balance the books without using reserves – due to the work the council has been doing with residents to support them through Covid-19.
Cllr Stewart also said that a “significant forecast budget shortfall” remains in the medium term and that without extra funding from the Government, more cuts will be needed in future years.
Cllr Graeme Miller, leader of Sunderland City Council, stressed that the majority of funding for local government comes from central grant.
He added fairer funding was needed in future to avoid
“passporting the cost of local government onto residents”.
Cllr Miller went on to say: “This council will continue to do the job it can given the resources that it has and we’re put in the position of having to put council tax up because if we don’t, we have to cut services.
“We’re in the middle of a Covid pandemic and we cannot cut services.”
Final proposals on the 2021/22 budget will be presented to the council’s cabinet in February.