Council Tax is set to rise for Newcastle residents
Councillors have voted for a 4.99% increase as well as spending and job cuts
A council tax rise in Newcastle and plans to slash Civic Centre spending by £37 million have been approved.
Councillors voted through a 4.99% increase in council tax for city households from this April on Wednesday night, the maximum uplift allowed without a referendum needing to be held.
Newcastle City Council’s plans will also see it cut 75 jobs over the next 12 months as it seeks to “streamline” public services.
The budget proposals were formally signed off after the city’s minority Labour administration accepted amendments from the Green Party, giving them enough votes in the council chamber to pass the spending plans.
A plea from independent councillor Marc Donnelly to limit the council tax rise to 3.15% was rejected, as were Liberal Democrat calls to bring forward extra spending on housing repairs, roads, parks, and play areas.
Labour council leader Karen Kilgour said her party, whose leadership of the authority is under threat at May’s local elections, was “serious about living within our means while protecting the most vulnerable” and talked up promises to invest £50 million in improving the city’s roads and build 15,000 new homes over the coming years.
She said that the 4.99% council tax increase, which includes a 2% adult social care precept, was not a decision taken lightly but that without it the council would be “forced to make cuts to frontline services”.
The final council budget plans involve an initial £4.9 million of savings in 2026/27. However, a total £37.1 million funding gap is projected over the next three years, which bosses hope to close through a modernisation of services to make them more cost-efficient.
The council’s initial proposals include:
“Consolidating” its customer contact services within one centre;
A “streamlining” to remove vacancies, duplication, and “unnecessary” supervisory or management jobs;
Reducing spending on third party agency workers, following recent concerns over the “eye-watering” sum being spent on legal fees;
Training staff to use AI to “work smarter”;
Investing in more independent travel training for young people with special educational needs, to reduce spending on home to school transport.
Lib Dem opposition leader Colin Ferguson raised concerns that whoever runs the council after May will be tasked with finding ways to cover the bulk of the deficit and said it was unclear where the 75 jobs losses would come from.
Coun Ferguson said that Labour “don’t want to tell you where the service cuts are going to happen”.
After the council received an extra £2.9 million from the Government in its final funding settlement for next year, Coun Donnelly proposed using that to limit the council tax rise rather than to limit the amount of cash reserves being spent to balance the books.
The Chapel ward councillor said: “Households across our city continue to face sustained pressure from energy costs, food prices, rents and mortgages. A reduction from 4.99% to 3.15% will not solve every challenge, but it is a meaningful signal that we understand those pressures.
“We often call for fairer funding from Government and rightly so. But when additional funding is secured, it is reasonable to ask whether some of that benefit should flow through to residents”
His amendment to the budget was voted down, as were the Lib Dems’. The main opposition party had proposed an additional £1.4 million of capital upgrades to parks and play areas, bringing forward £1 million worth of spending on both housing and roads, and abolishing the £180,000 position of deputy chief executive.
But Labour did accept amendments from the Greens. Their suggestions included the launch of a £100,000 pilot to give rent subsidies to community groups and limiting heating bill increases for residents on district heating networks, following concerns about the costs faced by homeowners on the Byker Estate.
Green group leader and Byker councillor Nick Hartley said: “Residents across Newcastle are telling us they want grown-up, collaborative politics that focuses on the issues affecting their daily lives. We went into the Civic Centre ready to fight for practical changes that would make this budget fairer for our communities.”
Councillors also backed a proposal from the Newcastle Independents’ Tracey Mitchell to set up a cross-party task force that will come up with “clear deliverable savings options” in the next six months.
After the meeting, Coun Kilgour said: “This budget is the most transformative in more than a decade and listens to the will of our residents. Protect services and focus on making our council more efficient.
“Our Change and Innovation Programme won’t just make savings, it will modernise our council and empower our communities in an ever-changing world.
“It will also allow us to make significant investment to benefit our residents, whether that be filling potholes, building new homes or making our city the home of culture.”