Hartlepool council departments face cuts of 40% amid £6million funding shortfall

That is the stark warning laid out in the report to next week’s meeting of Hartlepool Borough Council’s Finance and Policy Committee.

Related: Hartlepool council tax payers could face an almost 6% rise if proposal wins backing

It says the council faces a shortfall of between £5.2million and £6million on its annual £84million budget for the year 2019-2020.

An analysis of spending shows around £66million goes on areas such as adult social care, looked after children, refuse collection and disposal, and loan repayments which cannot be reduced.

“Therefore, the forecast budget deficit in 2019/20 will have to be identified by cutting the remaining £14m to £18m of the budget – this would equate to cuts in these areas of between approximately 40% and 30%.”

“A further report on developing a strategy to address the increased 2019/20 deficit will be reported to a future meeting.”

The report also explains how changes to the way local authority spending is paid for - moving away from central government funding to a greater reliance on council tax and allowing councils to keep more of the business rates raised in their area - has an adverse impact on the likes of Hartlepool.

“The Government issued the 2018/19 Local Government Finance Settlement on 19th December 2017 and this confirmed that Local Government funding cuts will continue until 2019/20,” says the report.

“This means the sector will have faced nine consecutive years of funding cuts – which is unprecedented.

“The cuts in Government funding have had a disproportionate impact on councils, including Hartlepool, which were more dependent on Government grant in 2010/11.

“These authorities also had least ability to fund services locally from council tax owing to the make-up of the council tax base – i.e. a high proportion of properties in the low council tax bands.

“For example, 56% of Hartlepool’s properties are in Band A, compared to 25% nationally.

“Government figures show that over the five year period of 2015/16 to 2019/20 the council’s core spending power will only increase by £1.089million, an increase of only 1.3%, which is significantly less than the national core spending increase of 2.1%.

“For Hartlepool, and many other authorities, the additional retained business rates income of moving from a 50% scheme to a 75% scheme will not be sufficient to replace the lost grant income.

“When account is taken of inflation and budget pressures in relation to adult social care and looked after children there is a real terms reduction in funding for councils of 10% over this period.”