Tameside Tackles £40 million Budget Challenge

Date Released - 01/03/2023

RISING demand for services, 13 years of funding cuts, and the highest inflation rates since the 1980s have forced Tameside Council to announce an overall 4.99% increase in council tax, which includes a 2% adult social care precept for 2023-24. The income generated from this charge is ring-fenced, meaning it can only be used for adult social care services.

The decision was taken by Full Council on 28 February and means a typical band A property will pay an extra £1.06 per week in total. A typical band D property would pay an extra £1.59 per week. 

The largest component of local Council funding is government support grants and despite inflation above 10%, Tameside Council net spending power from 2022/23 has only increased by 6.3% leaving us to find £27.2m from other sources. These sources are:

Savings of more than £180 million have already been achieved through efficiencies and cut backs since 2010 and the council aims to achieve a further £20 million of budget reductions and efficiencies in 2023/24 while at the same time still protecting and delivering critical front line services.

This still leaves a shortfall and so with the rise in Council Tax and Adult Social Care Precept generating an addition £5.2 million, it is much needed money to balance the budget, deliver vital services and to continue to support residents, workers and businesses across the borough including paying a real living wage to those who care for our frail elderly.

The Council has a legal requirement to set a balanced budget for 2023/2024 and set a Council Tax. The total amount the council spends annually – including money handed directly to schools – is over £600 million. While this is a significant amount of money, in real terms and accounting for inflation, this is significantly lower than in previous years and the Council’s spending power has been reduced by some 24% since 2010/2011.

The Council is under a legal obligation to provide many of its services. These include specialist services for vulnerable children and adults, demand for which has multiplied many times in recent years. Additionally there are things like waste collection and roads maintenance.

Cllr Jacqueline North, executive cabinet member with responsibility for finance, said: “Year after year after year, government cuts our funding in real terms making local sources of income, including council tax, increasingly important as a source of income to local government, forming an increasing proportion of the budget.

“As a consequence, every year the council has to look at reducing its budgets through efficiencies and other savings, increases in fees and service cuts.

“We are very worried about what an increase in Council Tax means to people but after taking into account money generated though additional income, we still have to find around £25 million this coming year to fill the £40 million gap. Otherwise, our budget would be unlawful.

“To pay for such a sum, we would need to increase council tax by around 25%. Even if that was lawful, it is not something we could bring ourselves to do. Government gives us too little and expects us to somehow find a way, with a clear message that raising Council Tax to a new maximum is what is expected otherwise they will cut our funding further.

“Although only 20% of the £25 million will be raised by council tax increases, this is money that will go straight back into protecting and preserving vital services – especially those that support our most vulnerable residents – and providing a real living wage for our carers.”