Leaders still aiming for council tax freeze as Hartlepool faces a £6million budget black hole after covid impact

Hartlepool Borough Council finance officers are forecasting a deficit of just over £4million for 2021/22, but added it could rise to £6.2million if the Government do not provide an additional social care grant.

A similar grant was awarded last year and council chiefs hope the Government will recognise the ‘financial uncertainty’ faced by local authorities and provide the funding again.

It was reported earlier this year the council planned to fund next year’s deficit from its reserves, and officers are advising this remains the ‘appropriate strategy’ despite the deficit being larger than previously expected.

Officers say the increase is due to issues including continuing children’s services pressures caused by Covid-19, such as a rise in the number of young people coming into care, and fewer leaving.

A report from Chris Little, council director of resources and development, notes using reserves is not a permanent solution and defers a deficit until 2022/23, but is the best course of action due to uncertainty caused by Covid-19.

He said: “There remains significant uncertainty over the continuing impact of the pandemic and the resulting financial impact on individual councils.

“The deficit includes forecast income shortfalls which may be temporary for 2021/22 if activity returns to normal levels over the next 18 months.

“This will depend how peoples’ behaviours may have changed as a result of the pandemic and whether there are further outbreaks."

He added: “Achieving permanent savings of this magnitude would undermine capacity of the council to support the town recover from the pandemic and consume a significant amount of management capacity.”

He added a major reform of Local Government has also been delayed until 2022/23, and means there is significant uncertainty regarding funding levels beyond 2021/22 – particularly in relation to social care.

Hartlepool Borough Council had previously faced nine consecutive years of cuts in Government funding up to 2019/20.

In his report, Mr Little added: “The decisions to be made by members over the next few months will be critical to the financial resilience and sustainability of the council.”

The report, which also provides further financial updates looking ahead to 2022/23, is to go before councillors on the finance and policy committee on Monday.

It also notes it is becoming increasingly unlikely the 2020/21 provisional Local Government Finance Settlement will be issued in time for December’s finance and policy committee.

Therefore, final decisions regarding the 2021/22 budget will likely need to be considered in January, later than previously planned.

This will include deciding on the rate of council tax, and earlier this year councillors from the leading Independent Union and Conservative coalition said they were working on a plan to freeze council tax next year in Hartlepool

Ahead of the meeting, both the Independent Union and Conservatives groups on the council reiterated their desire to freeze council tax.

Posting on Facebook, they said: “Our position remains the same.

“We are working tirelessly to guarantee no increase in your Council Tax for the forthcoming year in an attempt to help people who have suffered financially during Covid-19.”

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