Frequently Asked Questions

Our General Fund is made up of several income streams: Council Tax, Business Rates, government grants, and fees and charges.

Each year the government decides how much funding councils receive. This is usually confirmed in December, shortly after we publish our own budget proposals.

Over the last 14 years, the proportion of our funding coming from general government grants has steadily reduced. In the same period, Council Tax has become an increasingly important part of our income.

Business Rates are set nationally, and many smaller businesses do not pay them.

We also apply for specific project funding from government – for example, for schemes such as the Ambition for North Shields and the seafront sustainable travel route.

Some services, such as Council Housing, operate separately from the General Fund and are paid for entirely through the rents and charges they collect.

Council Tax helps to fund hundreds of local services – not just the ones you might use personally.

Since 2014/15, the share of our budget funded directly through Council Tax has risen from 44% to 64%, reflecting the reduction in government funding over that time.

Most of our budget is spent on social care to support the borough’s most vulnerable residents. Council Tax also contributes towards waste and recycling collections, highway maintenance, libraries, leisure services and many other day-to-day council functions.

Over the past 14 years our overall budget has reduced significantly. This is due to falling government grants, inflation, and increasing demand for our services. During this time, we have lost more than £470m in central government funding.

Council Tax rises help, but they do not cover the full shortfall. Demand for services – especially adult and children’s social care – continues to grow, and the cost of providing care is rising. In some cases we must use specialist private services that cannot be delivered in-house.

To make savings, the Council has launched 14 transformation projects aimed at improving value for money while maintaining quality. These have already delivered around £10m in savings.

Income from garden waste collections goes into the General Fund.

We must find new ways to raise income and make savings so we can protect essential frontline services for those who need them most.

Garden waste is not a service councils are required to provide, and most councils in England already charge for it. We were the last council in the North East to introduce a charge, and ours remains the lowest.

Households only pay if they choose to opt in.

Councils hold reserves so they can plan for known risks and respond to unexpected events. Reserves fall into three categories:

• Earmarked reserves for identified risks such as insurance
• Ring-fenced reserves that can only be used for specific purposes
• General reserves for emergencies

Reserves are not there to fund day-to-day services and can only be spent once.

Some funding we receive must be spent on specific projects. For example, a Government Active Travel grant can only be used on sustainable transport projects such as cycleways, not on road repairs or other council services.

The Council also has two distinct types of budget: capital and revenue. These are different pots of money and cannot be mixed.

• Capital spending pays for one-off investments like buildings, roads, machinery or equipment. It’s similar to a household buying a home or a car.
• Revenue spending covers the ongoing costs of running services – the day-to-day bills and expenses, like groceries, utilities or monthly rent.

A small part of your Council Tax is made up of “precepts” – contributions to the police, fire and transport authorities. These amounts support the running of those services locally, but the Council does not control how the money is spent. It does, however, give us a seat at the table with partners to jointly support residents across North Tyneside.

Yes. Since the Education Act 1988, schools have had their own individual budgets, and governing bodies are responsible for how that money is spent.

Increases to council rents is governed by the Consumer Price Index (CPI) based on inflation the previous September plus 1%.  This year the interest at this time was 3.8% so plus 1% results in a proposed rent increase of 4.8%.

Increasing council rents by CPI helps ensure that the income used to manage, repair, and improve council housing keeps up with rising costs. This protects housing quality, financial sustainability, and the long-term viability of affordable homes.

If rents don’t rise with CPI , councils effectively lose real income which leaves a financial hole in the 30 year Housing Business Plan.