Council tax rise and cuts to crisis support services

(Newcastle) cannot be treated as a destination for homelessness or street begging

Coun Colin Frew

A4.99% council tax rise and almost £15m of spending cuts in Newcastle have been signed off, as a row rumbles on over delayed plans that could slash the number of emergency beds available for the city’s homeless.

Crisis support services and a scheme providing basic items for people in poverty will be hit by budget cut proposals signed off by councillors on Wednesday night, while residents also face higher charges for replacement bins, garden waste collections, and car parking.

Labour-run Newcastle City Council has warned that it must find £60m worth of savings by 2027 to balance its books, including £14.4m over the next 12 months, as it battles with rising demand on services and reductions in Government funding.

Council cabinet member Paul Frew told colleagues at this week’s annual budget meeting that there was “no low hanging fruit” left at the civic centre that could be targeted for cuts after 14 years of austerity measures, which have already seen £369m slashed, but insisted Newcastle was in a “much better position than comparable local authorities”.

Newcastle’s decisions came the day after Birmingham City Council, which has effectively declared bankruptcy, voted to make £300m worth of cuts and impose a 21% council tax hike over the next two years, amid widespread fears about a financial crisis in local government that could result in more town halls going under and essential frontline services being devastated.

Nick Kemp, Newcastle’s Labour leader, warned that local authorities had been plunged into an “existential crisis” and that the model to fund council services “simply does not work”.

Much of the attention on the Tyneside spending cuts has focused on a proposal that would have seen the council halve its spending on beds and other support services for rough sleepers – something that charities branded “inhumane” and claimed would leave vulnerable people to die on the streets.

That plan was paused last month following the major backlash, but local authority bosses have said they will still be putting the service under review and want to “redesign the system and make efficiency savings by reducing the number of beds commissioned”.

Coun Frew, the council’s cabinet member for finance, said on Wednesday night that it was right for the council to periodically review its services – adding that Newcastle “cannot be treated as a destination for homelessness or street begging”, as he told colleagues that half of the area’s rough sleepers come from outside the city.

Lib Dem opposition leader Colin Ferguson, whose party unsuccessfully sought to amend the council budget to cancel the homelessness prevention review entirely, called that rationale “obscene” and accused the council of “creating more challenges for the financially and socially vulnerable”.

The final budget proposals voted through by the council include:

■ A council tax rise of the maximum allowed 4.99%, including a 2% precept towards the cost of adult social care, amounting to a yearly increase of between £63.85 and £191.55 depending on a house’s banding;

■ Ceasing the council’s crisis support service, which has a £100,000 annual provision to help people suffering emergencies through circumstances including domestic violence and financial abuse;

■ Cutting the budget of a supporting independence scheme, which provides access to basic items such as beds and cookers to people in poverty, from £457,000 to £100,000;

■ Removal of an Intensive Family Intervention Team, which works with families whose children are at risk of being taken into care;

■ Reducing a subsidy for the city’s school meal service by £537,000 and charging schools an extra 50p per meal;

■ Higher charges for wheelie bins, garden waste collection, parking permits and car parking;

■ The loss of 40 council jobs, including 20 currently vacant posts.

The Lib Dems also proposed amendments on Wednesday night that would have delayed the council’s introduction of the Real Living Wage for external contractors in order to reverse the cuts to the crisis and supporting independence programmes, reversed the increased bin charges, and sought a 5% reduction in the authority’s energy usage.

Opposition councillor Christine Morrissey said she “wholeheartedly supports” the Real Living Wage and wanted it implemented, but “cannot sanction a decision that will be to the detriment of our most vulnerable residents”. But Labour called the prospect of postponing its Real Living Wage commitment “unconscionable”, with deputy council leader Karen Kilgour saying it would deprive care workers and others of “the wages they deserve”.

Tracey Mitchell, leader of the Newcastle Independents group, hit out at the planned 7.7% rent hike for council house tenants, which she said had left one couple in her ward “worried that they will have to move from the flat that they love because it is unaffordable”.