A 4.99 percent Council Tax increase is tabled for Sunderland City Council’s budget.

The proposed increase follows Government guidelines and was endorsed today (Tuesday 9 February) at the council’s Cabinet meeting. Final decisions are due at the budget meeting on Wednesday 3 March.

Subject to March’s decision, the majority of Sunderland households would be paying less than £1 a week extra next year towards city services.

As part of its budget proposals, the council is also extending the Local Council Tax Support scheme, which will see eligible households get up to £150 off their bills. Current estimates are that around 16,500 working-age claimants will pay no council tax in relation to next year.

Demand for adult social care continues to grow and the three percent precept is expected to raise around £3m. For 2020/21 the adult social care budget was £157m and it is the biggest part of the council’s day-to-day spending at 23 percent.

A major investment programme to bring in more new homes, improve infrastructure, and promote economic growth is also part of this year’s budget and the ongoing City Plan for a dynamic, healthy and vibrant Sunderland.

Outlining council tax details at the Cabinet meeting, the council’s Deputy Leader Councillor Paul Stewart said: “The council has done its best to protect residents from the impact of the cuts since 2010. The compound impact of the Government’s significant and disproportionate funding reductions in previous years, combined with unavoidable unfunded cost pressures, means we are once again faced with very difficult decisions.

“Raising council tax is one of those difficult decisions. If we do not raise council tax, we will need to cut services further and reduce our investment into key priority areas. That would mean cuts in services to those most vulnerable in our communities and to the services which residents tell us are a high priority.

“Indeed, in its financial settlement, the Government assumes that all councils will raise council tax by the maximum permitted level – in our case 4.99 percent. You will hear the Government say that they are increasing funding for local government – unfortunately nationally over 87 percent of the increase is to be raised locally through council tax.

“In Sunderland, due to our relatively lower council tax base, this proportion is lower – but is still significant. 59 percent – more than half – of the increase that Government assumes will be available to Sunderland City Council is being met by our residents.

“The 4.99 percent increase represents an increase of 94p a week for a Band A property and despite the proposed increase, our Band D council tax will still remain the lowest in the region.”

He said the council, which has had its spending powers reduced by a third since 2010, would continue to ‘lobby the Government for a true fair funding agreement’ and the financial outlook remained ‘very uncertain’.

Cllr Stewart said: “There are continued unfunded cost pressures, combined with the ongoing uncertainty with regard to the Covid-19 pandemic as well as significant uncertainty around the impact of the Government’s spending review, fair funding review and the move to 75 percent retained business rates, all of which are scheduled for the medium term.

“Based on the best information we have at this time, and after taking into account proposed savings plans and assumed future council tax increases, there remains a budget gap of circa £35.7m over the three years 2022/23 to 2024/25.

“Work will, of course, continue to identify a further suite of proposals to address the remaining budget gap into future years and we continue to lobby the Government for a true fair funding agreement for all local government.”

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