Council waits for cash settlement to plan way ahead
A financially-stable council is preparing for new pressures this autumn as central Government recalculates local council funding.
Newcastle-under-Lyme Borough Council is beginning preparations for its 2026/27 budget knowing that Government changes to Business Rates will potentially leave the authority £1.5 million worse off.
Add another £270,000 of expected additional costs locally and the authority is currently facing a £1.77 million gap between known income and planned expenditure.
Simon Tagg, Leader of Newcastle-under-Lyme Borough Council, said:
Since 2018 our annual efficiency reviews have resulted in more than £10 million of budget savings for taxpayers, while focusing on delivering good quality services for residents.
We have been expecting this Government recalculation of Business Rates to affect us and preparing as best we can so our communities don’t suffer the consequences.
“We’ll find out the full position later this autumn and share the news as soon as we can.”
By law, councils must balance their budgets every year without borrowing to do so.
Stephen Sweeney, Deputy Leader of Newcastle-under-Lyme Borough Council and Cabinet member for Finance, Town Centres and Growth, has written to the Chancellor Rachel Reeves detailing the challenges facing the authority.
As well as the deficit created by recalculating Business Rates, other issues include:
- the cost of living crisis making it harder for residents to use council services, which in turn means reduced income;
- the unexpected cost of dealing with the forced reorganisation of Local Government;
- the rising cost of providing temporary accommodation for up to 50 nights for individuals and families made homeless.
Stephen Sweeney said:
In the last financial year the council spent £930,000 on providing temporary accommodation for people made homeless.
That’s around five per cent of the council’s total budget, more than double the figure a couple of years ago, and it’s driven by increasing demand and the rising cost of finding somewhere for people to stay.”
He added:
We have been dedicated in controlling our costs to ensure value for money, but it’s also essential that we receive a fair settlement from central government.”