Public Sector Property

20.02.19

‘Significant financial pressures’ forces Durham County Council into reserves as it approves £16m of cuts

Durham County Council has committed to cutbacks of £16m but pledged an additional £74m to capital investment as the authority drops into its reserves.

Following a £14.2m reduction in Durham’s revenue support grant from government, the council said it faces “significant financial pressures” and needs to make £15.8m worth of cutbacks in 2019-20 and save £39.5m over the next four years.

The news comes as the authority released its Medium-Term Financial Plan (MTFP) today.

Durham County Council leader Simon Henig said: “We continue to work hard to protect frontline services but as the financial pressures on the council increase this is becoming more and more difficult.

“Not only are we having to deal with cuts to our funding but we are now facing uncertainty caused by proposed changes to the way local government is funded.”

The council has approved a 2.99% increase in council tax as well as a 2% increase to the adult social care precept, raising a combined £10.5m.

It has agreed to take £5.5m from its reserves. The council’s total savings made between 2010-11 and 2022-23 now stand at £263m.

But also included in the MTFP is a commitment of an additional £84m from the council, which brings its total investment from 2018-2022 to £391m.

The council said the cash ringfenced for capital projects in Durham has been agreed by its members, and the capital programme will be mainly financed from government grants, capital receipts and prudent borrowing.

Henig said: “Continuing austerity means that we are going to have to manage significant financial pressures for the foreseeable future. However, it is vital that we continue to invest in capital infrastructure if we are to grow our local economy.

“Additional investment will not only improve infrastructure but will help us retain existing jobs and create new ones as well as ensuring that key council services are maintained.”

Projects include £2.4m to be spent on the county’s towns and villages, an additional £17.5m investment in the highways network, and a further £6.6m for the creation of a Durham history centre.

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