Council adjusts budget to reflect Autumn Statement
LEADERS at the region’s largest council will be given an update on its financial position following the
Autumn Budget.
Durham County Council’s Cabinet will hear that the authority continues to operate in a period of
significant financial uncertainty and challenge due to increasing costs and greater demand for social
care provision. Following the government’s Autumn Budget in October, the council has updated its
financial forecasts to reflect the announcements made.
Councillors will hear that, despite some additional funding being announced in the Budget, the
authority’s financial position has worsened and it now faces a deficit of £69.7m over the next four
years, with £25.6m of this next year. The gap the council faces in balancing its budget next year has
risen by £3.8m on the previously forecast position. This has been influenced by the higher-than-
expected increase in National Living Wage and changes in employers’ national insurance announced
in the Budget, which will have a direct inflationary impact on the rates of fees charged by adult social
care providers and its other suppliers.
The authority acknowledges that additional funding from government has been announced in the
Budget towards delivering social care. However, this funding will only cover 25 per cent of the
additional costs the council will have to cover next year to meet demand and the forecasted
increases in the cost of provision for adult and children’s social care.
The report notes that additional council tax raising capacity is likely to be announced in December
and that the recommendation will be that this is pursued to reduce impacts on front line service
delivery and reduce the reliance on reserves to balance the authority’s budget.
Cllr Richard Bell, deputy leader of Durham County Council and Cabinet member for finance, said:
“We continue to operate in a period of significant financial uncertainty and challenge as our cost
pressures continue, and support from government remains inadequate.
“We continue to lobby government to change the unfair current local governance finance system.
We welcome the statements made in the Budget about seeking to address this and level the playing
field in terms of tax raising capacity and demand pressures linked to deprivation and increased need.
“The delivery of an additional £69.788 million of budget savings over the next four years will be
extremely challenging and will require a fundamental rethink and significant transformational
change.
“Changes of this magnitude will require careful planning however our emphasis is always on
protecting front line services as much as possible. We continue to react to funding announcements
and changes in the financial climate to maximise savings and balance the budget while ensuring we
can continue to deliver vital services.
“Nonetheless, despite the ongoing budget pressures, we continue to invest in our county in new
facilities for business, for example at NETPark, Sedgefield and South Church, Bishop Auckland, which
will provide more and better jobs for our residents.”
Cabinet will hear that the Budget included plans to reform local authority funding for 2026/27 to
ensure funding allocations reflect an up-to-date assessment of need and local tax bases and that the
government will issue multi-year financial settlements from 2026/27 onwards. The council has been
calling for this change for many years however it will need to wait until further detail has been
confirmed in the Local Government Finance Settlement (LGFS) announced in December.
In light of the Budget announcements, the council has developed new proposals which would save
£15.8m over the next four years, with £14.7m of these to be delivered in 2025/26.
If agreed by Cabinet next week, these proposals will go to Full Council in February where, if
approved, they would reduce the authority’s forecast budget deficit to £10.9m in 2025/26 and
£53.9m across the four-year period.
The funding gap could also be reduced if the council is given additional tax raising powers by
government. The authority has currently based its budget on a 2.99 per cent increase however if the
government allows this to rise to 4.99 per cent, this could reduce the council’s deficit for 2025/26 to
between £6m and £5m.
Clarity on tax raising powers will also be announced in the LGFS, which will outline whether local
authorities will be able to raise council tax in 2025/26.
Cabinet will hear more details when it meets on Wednesday, 4 December at 9.30am.
