Budget Webinar Questions and Answers

As you don’t know the expected income from Council tax, how do you ensure you have sufficient funding over five years? Do you need to rely on assumptions and what do you do if the assumptions are out from what you expected?

I think we have some certainty over what our current population is and we know the different mix of Council tax bands.  You may hear people talk about band D equivalents. There's about 103,000 properties in the borough currently, that gets converted using a government funding into how many band D equivalents, and we've got about 65,000 band D equivalents  

Properties in the lower bands count for less than a home, and the higher bands account for more than a home of band D equivalent. We factor in what we know will happen in terms of housing growth. We know how many planning applications are in, we know where there's housing development coming, so we can estimate how many homes there will be that will pay Council Tax. 

There is a degree of uncertainty. We've got uncertainty in terms of how much business rate income we get.  We collect all business rates in the borough, we can retain roughly half of it. The rest of it, the other half goes to Government, and they use that to fund the top up that we get in terms of Government funding. But there is uncertainty.

Both with Council Tax and business rates, there have been discussions about are they fit for the future? The different band levels are based on the relative house values in 1991. It is very historic. Changing that system might happen in the future, but it would be a significant undertaking for the government. 

The bigger uncertainty for us comes more in terms of what our cost side will be. Social care costs are going up significantly. Children's social care cost inflation is running in some instances well over 20% and we've had a couple of cases where charging has more than doubled for very similar provision. 

The other uncertainty we've got at the minute is government funding, but hopefully we'll get that when we find out next year's funding, probably next week, and we'll get an indication of what the year 2 and year 3 funding will be. The new government is committed to a multi-year funding settlement and that will give us more indication of what might come in the future.
 

Is it still cost effective to outsource to Capita? I read about many organisations are bringing services back in-house to save money? 

Our main contract with Capita came to an end last January. We still continue to use Capita, which I'll come back to in a second, but the day-to-day repairs and maintenance on the highways, the planning services and some of the strategic property came back in-house in January 2025, January this year. That was early. It was a couple of years before the end of the contract.  We managed to negotiate an early termination that worked for both us and for Capita and that was certainly one of cabinets political objectives to try and bring things in-house or buy from ourselves as much as possible. Similarly, we brought a number of services in from Equan's early, which was in May 2023, I think it was around finance, IT and HR services. So there's been a general shift to in-source where it's appropriate, but we will continue to use companies such as Capita.  Capita are currently working on some of our schemes because the Council doesn't either have the capacity or certain technical specialisms to do certain schemes, so, there will always be a role, but more increasingly on a case-by-case basis.  The Capita and Equan’s contracts were 15year contracts, major outsourcing contracts. We've moved away from that. So, as well as saving money, it also gives us more flexibility in our proposals. So for instance, in the past, the way the contract was structured, any increase in car parking charges the majority of that would have gone to Capita that now comes into the Council's finances, so it helps to reach a balanced budget and also it means we can plan how we repair roads and pavements in a different way. A way that is reflective of what we need now, not a contract that was negotiated and contracted back in 2012. 

Can you tell us more about how well the saving plans for the current year are being achieved?
There’s a lot of detail which is in the public domain, every two months the budget monitoring reports set out, as well as our overall financial performance, specifically against the savings that was set out in the medium term financial plan. Those 12 projects, it was 14 projects last year but we're going to merge them into 12 for next financial year. We have achieved £10,000,000 of savings this year, which built on the £10,000,000 of savings from the previous year. So, over the last couple of years
 £20 million.  Not all savings have been made as quick as possible and what the budget proposals moving forward do is to start to reprofile over a couple of years. A key area that we looked and was very prominent when we were doing these sessions last year, we were looking to reduce our workforce by about 200 colleagues, and we thought that would be achieved over two years. What we've realised is the time it's taken to make those changes is over a longer period. The totality of the saving is still expected to be achieved, but we're now saying that will be over three years. The other challenge is some of the social care challenges, especially in children’s services, while some of the individual projects have been made, some of the other challenges have grown more, hence we've had to put more savings in. A big challenge that we're looking to do is be efficient as an organisation and we are looking at things like AI. We're looking to do it in a measured way to make sure it goes through, but we're not rushing to do that. We're learning from what other people have done, but we have got some pilots that are currently in train on that. 

The housing management costs work out to be 18.8% of the budget.  This is quite high compared to other councils.  How does the council benchmark these against other councils?

When we've been preparing our budgets, one of the things that we did was to go through what we called a series of directorate budget reviews, so we did it for the General Fund, but also for the Housing Revenue Account. And one of the key things that we did was to look at where we had comparable data. So, for housing management and just to be clear, it's not the cost of the managers in the housing service, it is all of the tenancy support. Part of the reason that I think we may look high is that in the budget we have included £3,000,000 of tenancy support over the last couple of years. When benchmarking we need to make sure we’re comparing like with like. When we did the directorate budget reviews, we weren't a massive outlier when we could get a comparison against our statistical neighbours. 

One of the big areas in the budget will go to environment (£43,000,000), what does that look like? 

Every council is slightly different in terms of what they include in their Environment Service. Our Environment directorate includes; cutting the grass, maintaining the environment, it includes waste management, we include leisure services and library services in environment and in other councils these may be in a differently named
 area.  Of the £40 million, the two biggest individual areas are the contractual arrangements we have for street lighting, which I think is about £10 million in round terms and also our waste contract. So, the council officers collect the bin waggons that go around.  The refuse collectors are Council employees, but the cost of then disposing of that if you go to the waste transfer station near the Tyne Tunnel Trading Estate, High Flatworth that is run by an external organisation Sewers and in our case because they have the waste disposal, that then goes to one of their facilities down on Tees Port. We are out to re-procure as that contract is coming to an end. So we're out to procurement at the minute which should be in place to start for April 2027. But at the minute of the £43 million, half of it will go on street lighting and the waste contract. 

The next area that we spend a significant amount on, because it is a political priority for North Tyneside, are our leisure services and our libraries, so that's the swimming pools that we've got, the leisure centres that we've got across the borough and also the six main community hubs that we've got plus the six branch libraries that we've got across the borough. So those costs will sit in environment. That environment figure probably won't include all of the building costs, the building costs of the libraries and the leisure centres, the maintenance will be elsewhere, but they will be the individual biggest element and there is the political commitment around leisure and libraries about maintaining the provision that we've got.

Has the number of looked after children gone up this year?

There's a couple of key numbers that are important to assess our children in care, the numbers have stabilised but generally they've gone up significantly since COVID. What has gone up significantly is our looked after children and within that our external residential homes, so external, where the Council don't directly deliver that and that is individually the highest area of cost that we've got. So we've got more children than we'd expected, and we've got individual unit prices that have gone up. The costs are significant in those areas. I think last year the average external residential place was about £6000 a week it has gone up to about £8000 a week and that is the average. We have got some individual children, because of the complexity of their need, where the weekly cost can be over £20,000. So, the cost for one child can significantly affect the overall budget position. One of the things we do, because it's important that we provide the care that children need and we have to deal with the budget elsewhere, but we are trying to bring children where it's appropriate back in borough, into Council run facilities. Where it's appropriate, because of the needs of the children for their own safety or for their very specific needs being in a specialist provision, being out of the area may be necessary for them.
 But one of the things that we can look at and we've got some Council funded investment going into a new children's home and we've secured some government funding from the Department for Education for two facilities to come on. The DfE funded one is a three, 2 beds, but it's in one complex. That will be a more cost- effective way of providing that service and it will be, I would argue, better provision because sometimes families will want their child to be locally. But if there's not a local provision, they will have to go elsewhere in the country. But again, the budget monitoring report clearly sets out the different levels of provision that our looked after children are in.
We are one of the highest, if not the highest, performers in the country about kinship carers and that's where family members will provide that looking after children and will get some financial support to do that. 

We've then got a challenge about adopters nationally, a lot of adopters and people who've done adopting are an ageing cohort in genera there are obviously new people coming into the sector, but that is one of the challenges as to lose some of our people who supported the adopted children over the past few years, how do we re provide that? Because as an organisation we cannot just go sorry, there isn't a provision, we can't afford it. We've got to deal with that need when it comes through.

Overall, looked after children have gone up significantly from about 5-10 years ago. The number of children in external provision, external residential is more than doubled since before COVID. We are looking at what we can do to address that.
 

Many councils have outsourced leisure services. Is this something North Tyneside is considered?

 We have considered it as in, we've considered a range of options, but it was quickly discounted because when we looked at that, the loss of control that that would bring. The experience of some, not all, but some authorities who've outsourced things in the leisure world is the private sector will have a role in that the Council will never provide every service themselves. Leisure is a one that, politically, there's a commitment to continue to deliver it in house, but we've considered it to the extent of we compare what different options would be, what their costs would be. So, it's not one that's been explored in detail, but it has been considered as one of the potential options.
 

Are we going to be getting a bio waste facility or is that going to be across multiple local authorities, a waste, some of our waste team?

The food waste that's going to come online from April will need a biowaste facility which won't be physically located in the borough, we are currently considering tenders.  It is something that needs to be done at a regional level rather than trying to do one in borough or indeed doing it ourselves. 

Energy from waste needs to have a certain level of tonnage that goes into whatever the waste facility is. We are tendering and we're in the process of making sure that we get value for money because the cost associated with building an energy from waste plant is significant. The big facilities take many years, if not decades, to get through planning. So, our view was it was better to join an existing facility in Tees Port. That facility needs waste; waste has a value. There are costs of getting rid of it, but it has a value because the plant needs to be fed with fuel to generate the energy, so we are hopeful of a competitive set of bids coming in for the energy from waste. 

The other element that we've got in terms of waste is recycling the recycling contract was let a couple of years ago and again, there's a market for waste in the recycling world that will fluctuate. We managed to get a good financial deal that helps to underpin the budget, but disposing of that waste does come at a cost, but all of the collection from the doorsteps whether it be the garden waste that we introduced the charge last year, the recycling, the household bin and also the new food waste, the collection will all be done by Council officers.
 

What is the cost of the new food recycling scheme and is the council obliged to do it and what are the benefits - environmentally and financially?

The Council is required to offer a weekly collection of food waste under the Environment Act 2021. The treatment (disposal) of separated food waste is significantly cheaper than when it is mixed in with general waste and also better for the environment. The Council anticipates receiving financial support from Central Government to run the service and expects this to be made as part of the local government settlement over the coming weeks. Until this final figure is known it is not possible to advise on the full cost to the Council of running the new service.