Durham County Council faces bankruptcy unless it saves £52 million

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Reductions to council services, increases in waste and burial fees, and cuts to local jobs could all be on their way as Durham County Council urgently seeks to plug a £52.8 million gap in its finances within the next four years.

The Council has blamed various external factors for the budget deficit, chiefly rising energy costs and inflationary pressures. Councillor Mark Wilkes, a Liberal Democrat cabinet member in the council, has pointed blame for the situation at Labour for their previous governance of the council, describing the party’s spending practices as “unconscionable”.

Much of the savings measures have been “frontloaded” into 2023-2024, meaning that more than 70% of the cost cutting will take place next year rather than now. The Council has already overspent by £14.6 million this year, but has been able to fund this overspend using its financial reserves. However, council leaders have warned that this use of reserves to fill financial holes is unsustainable, and will lead to “difficult” choices in the months and years ahead.

Labour councillors have hit back at accusations that they should be blamed for the Council’s financial mess. Councillor Rob Crute, the party’s deputy Council leader, said that the deficit “could have been significantly reduced had coalition councillors not dithered over and delayed vital decisions on projects across our county.”

He accused the Liberal Democrat – Conservative – Independent coalition, who took power of the Council in last year’s elections, of “political grandstanding”, claiming that they “halt[ed] capital projects for a series of ‘reviews’, instead of recognising the importance of getting spades in the ground and delivering for residents and communities.”

The sentiment was echoed by County Durham Labour leader Cllr Carl Marshall, who warned that “On the council’s current trajectory, it will be bankrupt in two years. That is the stark reality County Durham faces.”

“On the council’s current trajectory, it will be bankrupt in two years.”

CLLR. CARL MARSHALL

In September, the governing coalition announced it would write to the then-Prime Minister Liz Truss to ask for more money and highlight the crisis in local government in the North East. It came as a degree of consensus across the parties in the Council emerged over the fact that some of these budget pressures are beyond the Council’s own control.

The war in Ukraine has severely affected energy and fuel costs in Durham, as well as across the country. This has come on the heels of the Covid-19 pandemic, which dramatically decreased sources of income from services such as leisure centres. Councillor Richard Bell, the Council’s deputy leader and also the Cabinet member for finance, also pointed to an increased demand for social care in County Durham, especially in the council’s budget for looked after children.

Bell, who is a Conservative councillor, said “The Government recently announced some welcome changes – to scrap the increase in National Insurance and measures to cap energy costs for an initial period of six months, and, while this support is welcome, much more is needed.”

He also hit back at Labour councillors by saying that Labour’s “Lacklustre slipshod approach to capital projects is a legacy that we are having to deal with across the county. If Labour councillors were really so interested in the details of the budget, rather than this political posturing, then they would have put forward an alternative this year, or attended cabinet meetings to ask questions.”

The new Prime Minister Rishi Sunak recently appointed Michael Gove as the latest Secretary of State for Levelling Up, Housing and Communities. It remains to be seen whether he will allocate more funding to Durham and other struggling local councils.

Image: Peter Robinson

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