Medium Term Financial Plan 2022-2027

Foreword by Councillor Tracey Dixon, Leader of the Council

As a Council, setting a balanced budget which allocates resources towards our priorities is one of the most difficult but important responsibilities we have. Each year, we weigh up pressures including increased demand for services, reduced central government funding, and competing commitments, priorities and ambitions.

While the pandemic has not defined us it continues to put an increased pressure on us as a local authority and our communities. From those involved in the provision of frontline services, including care services, NHS and health services to our schools, local businesses and voluntary sector partners - every area has been and continues to be challenged.

It is a challenge we continue to meet both now and into the new financial year. This is despite a reduction in our Government funding of almost 54% since 2010 and taking into account additional spending pressures from an ageing population and increases in inflation. Known and anticipated future changes to Government funding will mean that our financial position will continue to remain very tight.

Despite the ever-changing environment in which we are all forced to work due to Covid, South Tyneside Council has continued to provide key services for residents and deliver on community priorities. These range from continuing to protect and provide for vulnerable older people, to supporting families in crisis, to collecting household waste and keeping parks and beaches clean and accessible.

The Council’s robust financial management has meant that, when facing the unprecedented challenges presented by the pandemic, we have been able to continue to deliver priority services as well as additional support when needed. We also continue to quickly administer support to our business sector including the payment of business support grants of more than £50m since the start of the pandemic.

Despite the day to day challenges we have faced, we have maintained our relentless ambition to invest in South Tyneside and made steady progress on our regeneration and growth projects like the International Advanced Manufacturing Park and Holborn Riverside, which will help to create future jobs. As we enter a new phase of regeneration with a renewed vision for the Borough, the Council has been hugely successful in attracting millions of pounds of external funding for a range of regeneration schemes and we continue to do all we can to leverage any funding opportunities available to us.

We have also progressed innovative renewable energy schemes in each of our towns with the Viking Energy Network, Hebburn and Holborn Minewater schemes. We have delivered on our Sustainable South Tyneside Climate Change Action plan, setting a three-year target to cut carbon emissions by 4,285 tonnes by March 2023 and are already two thirds of the way to achieving that figure. This work will continue throughout the next financial year and beyond as we bring other organisations on our journey with us through initiatives such as Pledge South Tyneside.

As we set the budget for 2022/23, we have incorporated learning from the challenges we have faced over the last two years. Innovation in the use of technology and more agile ways of delivering services will continue into the future as we shape our new overarching strategic plan underpinned by refreshed organisational values and behaviours.

While we may have to adapt our investment plans to reflect the new demands and needs of communities in a post-pandemic era, we will continue to invest in the future of South Tyneside. These plans will be shaped by our continued engagement with you the residents of South Tyneside so that resources are allocated to meet your priorities.

Despite ongoing financial pressures, with this year’s Medium Term Financial Plan (MTFP), we believe we have set out an exciting and innovative way forward, which allows us to continue to deliver for residents, invest in capacity to tackle some of the root causes of the deprivation in the borough while also remaining able to respond to new challenges and plan and invest for the future.

Shaped to deliver our priorities

We have ambitious plans to regenerate our towns, homes and communities that will help us to attract investment, create jobs, improve health and create greater opportunities for South Tyneside for years to come.

To achieve our overall vision, we have agreed 10 strategic outcomes with partners under the themes of ‘People’ and ‘Place’. These are the things we will achieve over the next 10 years:

Knowing where we are going, being clear about what needs to be done most urgently and taking difficult decisions when we need to is how we remain focused on our priorities. In the shorter term we have identified and are delivering upon 5 community priorities:

• Support our young people in need
• Support families and older or vulnerable populations
• Invest in our natural and built environment
• Support town centres, villages, high streets and hospitality
• Create the conditions for economic recover and investment

We have a clear short-term plan regarding our recovery from the pandemic and we are working through the next steps to carry us through the medium term. Our medium-term strategy will be published in the summer and will focus on building resilience within our communities for the future.

We are further strengthening our organisational structure so that we are Shaped to Deliver our vision for South Tyneside. We are committed to the delivery of high quality, value for money services but we now do this in a different way, taking a corporate approach to reduce overlap and duplication with more emphasis on inclusion and engagement. The changes we are making in developing the organisation will underpin delivery of our priorities.

Focus on Place

Our vision for South Tyneside will only be achieved through investment in the borough. We will continue to create the infrastructure to attract new sustainable businesses to the borough, while also allowing our current businesses to flourish and supporting them through the pandemic. Our ongoing and new partnerships are essential in maintaining South Tyneside as a major player in the North East and beyond.

Focus on People

Our ambitious vision can only be fully realised through the people of South Tyneside. Services for children and adults have a key role to play in making South Tyneside an outstanding borough. We have a strong focus on services for children and adults to provide world class services despite the pandemic based around education, health, care and support. Our vision for the future involves raising aspirations and encouraging families to take advantage of new opportunities as they arise.

2022 and beyond

The settlement from Central Government means that the Council will need to save a further £6.6m in 2022/23. Consequently, we start our budget planning early and consult widely with residents, partners and our staff.

We have made significant progress and delivered over £183m savings over the last 12 years with no major service closures, while also seeing record levels of investment in the borough.

Key messages from our residents and partners in the budget consultation are shown below:

• Investing in our natural and built environment is the highest ranked community priority, and town centre regeneration is highlighted as the highest priority service. Significant funding within the Capital Investment Programme for schemes such as town centres, Holborn and IAMP reflects these priorities.
• The high priority placed on street cleaning and litter was highlighted. Within our Capital Investment Programme we have invested in new litter bins and our street cleansing budgets have been maintained.
• Climate change action priorities included a request for more innovative projects. We have planned investment in innovative energy schemes like the Holborn Energy Network, Hebburn Minewater Project and energy efficient street lighting.

This budget plan for 2022 to 2027 focuses on how we will use our limited resources in the best way to ensure that we focus on the things that matter the most.

Introduction by Cllr Joanne Bell, Lead Member Resources and Innovation

Realising our vision cannot be achieved in isolation and delivery of our community priorities. Service planning, commissioning and delivery must be planned, consistent and joined-up. All of our services must remain focused on improving outcomes for our communities in the most efficient and effective way. Our ability to do that was endorsed in 2017 when a Local Government Association corporate peer review found that:

South Tyneside is a high performing and ambitious organisation with a track record and reputation for the delivery of outstanding examples of regeneration projects

Working with our partners, we have delivered a huge range of services and successful outcomes for both the residents and businesses of South Tyneside, including:

• Emptied 6.5million bins including domestic waste, recycling, green “garden collections” and business waste & recycling. Less than 0.5% of household waste now ends up in landfill compared to 66% of waste in 2010;
• Maintained 564km of roads and 1,124km of footpaths and future additional investment planned through our capital programme;
• Distributing over £50m of Government funding to support businesses through the pandemic;
• Made over 2,700 hardship awards to support those in financial crisis as a result of the pandemic;
• Provided support to over 4,500 vulnerable people on a rolling basis with long term needs via residential care or support to live at home;
• Supported around 2,700 children (including 430 with child protection plans and 410 looked after children on a rolling basis) in a year. We support around 1,500 children in need on any given day and 230 care leavers;
• Delivering significant reductions in the Council’s carbon footprint, including a 2,070 tonne carbon emissions reduction achieved between 2019/20 and 2020/21;
• Continuing to deliver against the ambitions of the Sustainability South Tyneside Strategy, on track to meeting the target of a 25% total reduction in tonnes of CO2 emissions by 2023, and shortlisted for a prestigious LGC Climate Response Award for pioneering work on sustainability and renewable energy schemes;
• Engaging with over 400 businesses as part of our Business Survey;
• Providing more than 4,500 children and young people with food and activities as part of the summer Holiday Clubs;
• Secured over £3.6m in financial gains for residents of the borough accessing Welfare Benefits and Debt Support;
• Handled over 190,000 customer service enquiries calls through our contact centre.

All of these outcomes have been delivered at the same time as delivering £183m of efficiency savings as a Council to protect and deliver frontline services that are fit for the future.

What is the Medium Term Financial Plan?

This Medium Term Financial Plan (MTFP) outlines our approach to setting out our financial future. This document also sets the Council’s budget for 2022/23.

The Medium Term Financial Plan is one of the key Council strategic planning documents. It will fully integrate and complement our new overarching strategy which is being developed with partners and residents. This will set out our renewed long-term vision, priorities and the steps we will take to achieve them.

Our Financial Strategy

We have adopted an overall financial strategy, which commits us to a number of guiding principles. These are:

• Spending should be allocated to our priorities;
• Council Tax should be affordable for our residents;
• Members make real choices about investments;
• Financial planning should be based upon a long term time horizon ensuring appropriate levels of reserves are retained;
• Value for Money is achieved for all our spending, looking at Economy, the cost of providing a service, Efficiency, how much we get out for what we put in and Effectiveness, the impact of that service, whether or not it meets the desired outcomes.

The National Financial and Economic Context

Despite planned changes in the funding system for Local Government, councils such as South Tyneside remain dependent upon Government funding as a key source of income. Due to uncertain economic circumstances including the economic effects of the Covid-19 pandemic and the terms of the UK’s withdrawal from the European Union, funding to Local Government is expected to remain constrained.

Our core Government funding has reduced by almost 54% since 2010. The 2021 Autumn Budget and Spending Review provided allocations for Government Departmental funding over the coming three years. It was confirmed that core local government spending power is set to rise 3% per year over three years, which falls to a 1.8% real term uplift per annum after taking account of new statutory adult social care responsibilities. Despite requests for certainty over our funding, the funding allocation received from Government to individual councils was for 2022/23 only.

The Council receives 60% of its income from Council Tax payers and retained business rates. Previous cuts to central government funding and demand pressures have meant that councils now rely much more on local tax revenues for their overall funding. The budget has been calculated incorporating an increase of 2.95% in Council Tax in 2022/23. 1% of this increase relates to the adult social care levy contributing towards the funding gap within Adult Social Care Services.

During 2021 the Government announced major changes to adult social care funding and contributions from individuals towards their care. The financial impact upon the Council is uncertain going forward from these reforms but could be significant if the impact is not fully funded by Government given the demand pressures which have been exacerbated by the pandemic and a sizeable proportion of the Council’s budget which is spent in that area.

The Local Picture

The Medium Term Financial Plan is central to achieving our vision. In order to ensure our resources are directed towards the right priorities, we have developed a detailed understanding of the borough and our communities.

South Tyneside borough has a population of 151,930. The majority of our population is white British. 4.1% of the total population are from Black, Asian, or Minority Ethnicities, mainly Bangladeshi and Indian. The latest population projections (2021) show that by 040 the population of the borough could be 158,831, but with significant changes within the age profile of the borough, more older people and less working age people.

The population is projected to increase overall, but decrease amongst those of school and working age. The rising numbers of older people will have significant impact on how we provide services and represents a major challenge for the future, particularly for adult social care services and the costs of the national concessionary travel scheme. These projections have been factored into our financial planning.

Equality and Diversity

Equality is embedded throughout all of our services. We are committed to carrying out Equality Impact Assessments in each budget year once budget or service reviews referred to in this document are implemented to make sure we do not discriminate against individuals or groups. However we need to go further to tackle chronic deprivation within some of our communities and to recognise and embrace the diversity within our communities. These themes will form part of our emerging strategic plan.

Sustainability

We are committed to supporting a sustainable borough which deals with the challenges of climate change. This is reflected in the planning and implementation of any new policy or service. To strengthen its commitment to a sustainable borough, the Council published its Climate Change Strategy and action plan during 2020 and is delivering carbon reductions ahead of target.

Value for Money

Improving value for money is at the heart of everything we do. We always challenge ourselves to make sure our costs compare with others by identifying and challenging areas of high spend. Many of the redirection proposals within our 2022/23 budget will make us work more efficiently and will mean that Council Tax payers get more for their money.

Revenue Spending Plans

Each year, we have to identify what we need to spend on Council services in the coming year, and also have to identify our provisional spending plans for future years. Our planning period covers 5 years so that we ensure that our spending plans are affordable and match the money we expect to receive from Government, Council Tax payers as well as use from our own reserves over a longer period. More of the financial risks we face cover longer periods e.g. demand on services from an ageing population and safeguarding of vulnerable adults and children, so it is prudent to extend our planning period.

The table below summarises our revenue spending plans for 2022/23 and provisional spending plans for 2023/24 to 2026/27 and how this is allocated across the Council’s service teams, as well as identifying the resources that we have available to fund our spending.

The diagram below shows our revenue budget for 2022/23 by Service Area. Children, Adults and Health includes Adults and Children’s social care, Public Health and Education support services. Business and Resources includes the back office services of ICT, Finance and Human Resources as well as Leisure, Culture, Revenues, Benefits and Customer Services. Governance and Corporate Affairs includes Legal and Governance, Democratic Services and Corporate Affairs. Regeneration and Environment includes Highways, Waste Services, Planning, Strategic Housing, Environmental Health and Trading Standards, Business Investment and Regeneration.

From 2013/14 the Government introduced a new system of funding councils. Each Council is allowed to retain almost 50% of business rates collected. Government grant has been reduced accordingly to reflect this additional income now retained by councils.

In 2022/23 we will receive 40% of our revenue from Central Government and 60% from Council Tax and retained Business Rates. 2022/23 is a one year settlement following the delay in implementing the Government’s Fair Funding review. As well as taking decisions about the overall level of funding to provide to councils, the Government will have to take decisions about how that funding should be distributed between them. We have estimated government funding available to us in 2023/24 to 2026/27 based upon national Government anticipated spending plans.

From 2017/18 councils with responsibility for adult social care have been given by the Government the ability to raise council tax by an additional levy to fund a budget shortfall in this area. The increase of 2.95% in 2022/23 includes a 1% increase in respect of Adult Social Care and a 1.95% annual increase. The table at paragraph 12 shows the amount of Council Tax we will collect in 2022/23 with the increase of 2.95%. For planning purposes only, we have included the estimated income in 2023/24 to 2026/27, based upon Council Tax revenues increasing by 1%.

The actual increases in Council Tax income in 2023/24 to 2026/27 will depend on circumstances at the time, including the level of actual funding received from Government and income from business rates. This may be higher or lower than these planning assumptions and, as such do not represent commitments by the Council at this time. At our current Council Tax Base, a 1% increase in the Council Tax level would generate an additional £0.680m of income.

Schools expenditure is funded from a Dedicated Schools Grant which is ring-fenced. The Schools, Central Schools Services, Early Years and High Needs elements have been confirmed for 2022/23 but the Recoupment figure which is paid over to academy schools will be confirmed in April. The figure quoted in paragraph 12 for Dedicated Schools Grant is shown after the estimated recoupment.

Appendix 1A provides more detail on the 2022/23 revenue budgets for each service.

Budget Pressures

The Council needs to spend more money to keep services at their current level especially given prevailing levels of inflation. We also need to spend money to deliver our vision for South Tyneside by progressing our priorities. To continue to deliver our current services and to deliver our vision we will need to spend an extra £13.7m in 2022/23, and a further estimated £10.6m in 2023/24, £9.2m in 2024/25 and £8m in 2025/26 and 2026/27. These figures have been estimated from forecasted activity / demand levels using specific cost drivers and taking account of changes in specific grant funding. A summary of these pressures is shown in the table below and full details are set out in Appendix 1B.

Demand for our services, especially adult care and supporting vulnerable children, continues to increase, coupled with rising costs in providing these services means that we need to spend more money just to carry on meeting the demand for the services we currently provide.

Redirection of current spending

The funding we estimate to receive from Government and from Council Tax payers over the next five years is not sufficient to cover our current level of spend plus our new budget pressures. Therefore, to make sure we can continue to focus spending on our priorities, we have identified proposals for reducing spending and increasing efficiency across all of the Council’s services both in the short and medium term. This will mean that our spending plans are affordable, and match the money we expect to receive.

Where possible, we have identified where we can reduce spending on support functions by working more efficiently so that we can protect front line services.

Plans for reducing spending, delivering new models of service, additional income and increasing efficiency in 2022/23 are shown in the following table.

Council Tax Income

The following section provides further information on our Council Tax levels from 1st April 2022.

To fund our spending plans which are inclusive of levies from external bodies to support functions such as transport and flood defence, we need to increase our proportion of the borough’s Council Tax in 2022/23 to raise £68.017m. The overall council tax level set for the borough includes precepts for the Tyne & Wear Fire and Civil Defence Authority and Northumbria Police and Crime Commissioner. From 2017/18 Councils with responsibility for adult social care have been given the ability to raise council tax by an additional levy to cover a funding shortfall in this area. The figures below include a 1% increase in respect of Adult Social Care and a 1.95% annual increase. Due to the pressures within Adult Social Care, there will still remain a significant funding gap.

Tyne & Wear Fire and Civil Defence Authority have confirmed a precept increase of 1.99% and the Northumbria Police and Crime Commissioner an increase of 6.95%.

The table below identifies the Council Tax for each property band:

South Tyneside Council Tax for 2022/23

The Council Tax increase for the borough is shown in the table below for each property band.

* Percentage change is inclusive of a 1% increase as permitted by Government towards the rising cost of adult social care

Capital Investment Programme

The Capital Investment Programme sets out our investment plans over the next 5 years to support regeneration and achieve our priorities as set out in the South Tyneside Economic Recovery Plan, the Council’s five community priorities and the South Tyneside Vision. This will be underpinned by our asset delivery model, which uses our resources as efficiently and effectively as possible to ensure services are provided in areas where they are needed.

The programme is financed by a mixture of external funding, Government grants, borrowing and capital receipts from sales of our assets. These receipts are generated through the disposal of Council land and buildings that are surplus to Council requirements. The target level of borrowing is affordable and consistent with our revenue budget forecasts.

External funding streams have been secured to support the funding of the programme. These include regional funds applied locally to support the overarching economic objectives of the wider region.

Community Priorities - Support town centres, villages, high streets and hospitality / Create the conditions for economic recovery and investment

We want South Tyneside to be a place that is attractive, prosperous, well-connected and business friendly. We want new businesses to set up here, existing businesses to grow and provide more high quality jobs for our residents.

We target our interventions to help unlock the potential of our businesses and sites, and connect all our communities and residents with employment and enterprise opportunities. These will be focused on those sectors and clusters that are strategically important to the economic growth of the borough in terms of increased employment and Gross Value Added (GVA). The key to this investment and growth is our ability to exploit the key strategic assets of the River Tyne (particularly our marine and offshore cluster and the base at the Port of Tyne for Dogger Bank Wind Farm, the largest offshore wind farm in the world), the A19 strategic employment corridor including the International Advanced Manufacturing Park, home to Nissan’s supply chain and the development of a new Gigafactory for Electric Vehicles and to maximise the opportunities along the foreshore and within our key urban centres, smaller towns and villages.

The Council’s South Shields Town Centre vision is improving the appearance and functionality of the town centre with The Word and new Transport Interchange now complete, together with the new DWP building at Mile End Road and a number of areas of improved public realm. These have been well received by residents and visitors alike. Building on this success, the forthcoming year will see the completion of the next phase of demolition work, as well as the development of plans to relocate South Tyneside college campus at Westoe Village to the Barrington Street area.

The Council has secured funding from the Future High Streets Fund to support the regeneration of three town centre locations. Firstly, Fowler Street improvement will see the acquisition of empty properties and the demolition of the former Central Library in preparation for new residential development. The remaining two locations will focus on the revitalisation of King Street and the development of a residential scheme at North Street car park. The proposed development will help create a more attractive environment that ensures a diverse range of businesses are attracted to the area, improving economic growth and helping retain and grow the existing retail and leisure core.

Better digital connectivity is needed as South Tyneside lags behind regional and national averages on full fibre broadband, so the Council – through Connected South Tyneside and the new Digital Infrastructure Strategy – are committed to attracting commercial investment to roll out future-proofed digital infrastructure. The Strategy also includes the rollout of public Wi-Fi in King Street, with the aim to roll this out to our other town centres if the initiative proves successful.

In addition, the South Tyneside Pledge was launched in January 2022 with the aim of encouraging public and private sector organisations in the borough to do everything they can to procure, spend, recruit and support South Tyneside. This includes commitments around maximising local procurement and supply chain activity, local recruitment and engagement with local schools.

Key Delivery Priorities:

• Regeneration of Town Centres and Villages
• Economic Growth and New High Quality Jobs
• Support and Develop Key Sectors
• Educate, Retain and Attract Young People
• Maximise the Impact of the Riverside Assets and the A19 Corridor
• Promote the Area as Best for Business

South Tyneside Council’s vision is to transform Holborn into a vibrant mixed use riverside location on the edge of South Shields Town Centre, incorporating 348 new dwellings and 200,000 sqft of new Grade A office space. This will see the development of a sustainable business and residential community which broadens the South Tyneside offer and builds upon the Council’s ongoing investment in South Shields Town Centre, Riverside and Foreshore. The site and its surroundings comprise some 10 hectares of land, of which 4.66 hectares are identified as an Enterprise Zone. The first phase of new houses commenced in January, together with extensive civil engineering works to deal with a failing river edge, flooding and legacy contamination from its industrial past.

The regeneration of Hebburn Town Centre has been a corporate priority of the Council for several years. A programme of public realm enhancements has been undertaken and to complement these works St Aloysius Primary School have approached the Council with a special project proposal – to support the ambition for a sculpture to stand as a permanent reminder of the history of the town. World renowned artist Ray Lonsdale is to be commissioned to design and create this unique piece of art ‘THIS IS US (and we are this)’ as a powerful tribute to the people and history of Hebburn. The Council is also considering future bids for the Levelling up Fund (Round 2 of which is likely to open in Spring 2022) focussed around regeneration activity in Hebburn or Jarrow.

Community Priority - Invest in our natural and built environment

We want South Tyneside to be clean, sustainable, green and safe, with a housing market and local services that offer affordability, quality and choice. We want to devolve more power to local communities and encourage residents to get involved in making their communities better.

South Tyneside Council completed the development of our first Council homes in over 10 years, with the successful completion of Henderson Road, Simonside, which has seen the development of 6 new two bedroom family homes for affordable rent.

The scheme was delivered by South Tyneside Homes Asset and Property Services team in partnership with Homes England funding and has provided real improvement to the local area and regeneration of previously vacant land. The scheme is the first completion in a pipeline of new, affordable Council housing to be developed in the borough, with the aim of delivering 250 new homes over the next five years, providing new opportunities for our residents, investing in our neighbourhoods and ensuring we provide suitable accommodation to meet housing demand within South Tyneside. The borough will lead the way in the design of new build projects and ongoing energy efficiency schemes. We will use our residential and community assets to their greatest effect and will work alongside partner local authorities to lever external investment.

The new Council owned housing development company, Centaurea Homes Limited, is on site developing 62 new family homes on the Lakes Estate in Jarrow for sale. All plots on Phase’s 1, 2 and 3 have now been sold and the show home on site has proved to be a real hit with customers, highlighting the excellent quality and appeal of the first Centaurea development.

Key Delivery Priorities:

• Housing Integration and Growth
• Investment in Neighbourhoods
• Reduce the Number of Long-term Empty Properties
• Improve Access to Schools, Services and Jobs
• Sufficient and Suitable Accommodation for Older People
• Reduce Crime and Disorder and Improve Perceptions
• Community and Civic Buildings
• Reducing Waste to Landfill, Increase Recycling and Reduce Our Carbon Footprint

Since the completion of the Decent Homes works in December 2016, South Tyneside Homes have progressed to a planned maintenance programme to maintain properties at the South Tyneside Decency Standard, which far exceeds that set by the Government.

An integral part of the Housing Capital Programme is to ensure that the homes we maintain are safe for the tenants within them and that they are compliant with all regulations. This investment is complimented by a wide range of environmental improvements on estates throughout the borough and, where necessary, selective demolition of unsuitable properties to aid estate regeneration.

2021/22 will have seen the delivery of £18m of capital investment works, ensuring that we provide new housing, sustainable estates and our homes are safe and maintained to the South Tyneside Decency Standard. Programme improvement works include (but are not limited to) properties benefitting from replacement kitchens, bathrooms, heating, window and roof replacements.

South Tyneside Council will continue to invest in Council owned properties with a programme being developed for 2022/23 which will see around £22m further investment to ensure that our homes are safe, decent and affordable for our tenants, whilst ensuring sustainability across the borough. The ongoing stock condition survey programme will allow more robust investment planning for the next 5 years and the Energy Performance Certificate information collected as part of this exercise will assist in developing carbon reduction initiatives and investment programmes as part of our commitment to a cleaner, greener South Tyneside.

To keep our neighbourhoods better connected we continue to invest in key strategic transport projects. Whitemare Pool Junction is classed as one of the main entry points into South Tyneside and has been identified as an area of congestion which is currently causing constraints on the network. Working with Highways England, the Council have completed an appraisal of the junction which has identified mitigation measures to increase the capacity by the delivery of improvements on the slip roads and junction approaches. We are also looking to unlock external funding opportunities to support this scheme which will be an integral part of the overall enhancements in the borough to improve traffic movement and reduce congestion.

The Council commissioned a review into our Riverside Structures to identify any areas of concern which would warrant further investigation. Two particular issues were highlighted, one in Jarrow and one in South Shields, and as a result the capital programme includes a scheme to remedy these concerns. Significant undercutting of the walkway beneath the jetty at Market Dock has been discovered and as such, specialists were tasked with carrying out a detailed survey of the area along with remedial recommendations. Structural works will rectify the current damaged areas and prevent further damage to the river wall.

Our spending plans include a significant increase in funding on resurfacing of roads and the continued flags to flexible programme which is substantially improving the condition of our footpaths. This continues to be recognised by residents as a high priority.

On the 18th July 2019, the Council declared a Climate Change Emergency. The motion declared a pledge to take all necessary steps to make South Tyneside Council carbon neutral by 2030. Our commitment towards climate change is strong and focused; implementing strategies that bring about real change, significantly reducing the amount of carbon being emitted, while increasing our renewable capabilities moving to a cleaner, greener, renewable source for our energy supplies. Emphasis will also be placed on how residents interact with their neighbourhoods, providing joined up services that promote civic pride and responsible citizenship.

Key Delivery Priorities

• Reducing emissions from Council buildings
• Providing opportunities for increased implementation of renewable and low carbon technologies
• Providing opportunities for decentralised energy and heating across the borough
• Ensuring the protection and development of a diverse and natural environment
• Championing and influencing positive behaviour changes, raising awareness on climate change challenges
• Supporting the transformation of travel behaviours, embracing sustainable, active and healthier modes of travel
• Raising the profile and implementation of carbon reduction and adaptations across the borough
• Championing and supporting the development of a low carbon, sustainable and resilient borough

The Council are embarking on a number of initiatives to reduce emissions and invest in renewable energy schemes and the Holborn Renewable Energy Network is the Council’s most ambitious energy scheme to date. The aim of the project is to use heat from abandoned flooded mines and the River Tyne to generate renewable energy to Council-owned and other public sector buildings. This, along with the similar Hebburn Minewater and Viking Energy Network schemes, is a major component in the Council’s drive to becoming carbon neutral by 2030, with the potential to cut carbon emissions by 22% whilst saving the Council more than £800k per year. Using a combination of technologies, the scheme will generate electricity using solar panels and heat pumps as well as converting gas produced from wood and green waste into renewable fuel. Whilst still in the developmental phase the scheme has already attracted over £4m Government funding for the initial enabling works and the Council are working with Government departments to maximise any further external funding opportunities.

As we strive to secure grants to support our capital programme a successful bid has been made to the Innovative Flood and Coastal Resilience fund, for which South Tyneside Council was one of 25 successful projects to be fully funded through the Environment Agency Flood Defence Grant and Aid. This bid, Stronger Shores is a new and exciting coastal adaptation project which aims to improve understanding of the coastal and flood protection value of marine habitats and their wider role in adapting to climate change and biodiversity management. The project will deliver a number of innovative resilience actions, including restoration of sub-tidal habitats, such as kelp beds, oyster reefs and sea grass, to protect against coastal erosion and flooding. These habitats can play an extensive role in mitigating against climate change as they sequester and store carbon and so the Council aim to put new approaches to the test to harness these resilient qualities.

In our bid to maximise recycling opportunities the Council is installing stainless steel “Feed the Fish” bins. This is to encourage the visitors to the foreshore, as well as the rest of the borough, to take the opportunity to recycle their plastic bottles. Also a further 25 strategically placed bins will be sited for glass, plastic bottles and cans ‘on the go’ to capture additional recycling.

Investment in road safety will continue with a particular focus around pedestrian safety and the introduction of further 20mph speed limits. The capital funding will help provide safer routes for all, as well as encouraging healthier forms of travel like walking and cycling.

• Giving Every Child A Good Start In Life
• Increasing Healthy Life Expectancy
• Better Employment Prospects for Young People
• Reduce Social Isolation amongst Older People
• Integrate Health and Social Care Services
• New Services for Children and Adults
• Community and Civic Buildings

Community Priorities - Supporting our young people in need / Support families and older or vulnerable populations

We want to ensure that children, adults and families in South Tyneside are healthy and happy, with the education, skills and resilience to become the best that they can be. We will support families to ensure that our children and young people have a safe and positive start to their lives.

We want South Tyneside’s children and families to get the best start in life, remain healthy and aspire to a brighter future. To ensure everyone reaches their full potential, we will work with partners to provide the best possible learning opportunities, with targeted protection, care and support for those in greatest need.

This is the vision we have developed for children and young people in South Tyneside. Our Best Start in Life Strategy, sets out our commitment and approach to improving the lives of children and families in South Tyneside. The Council is also developing a refreshed Health and Wellbeing Strategy.

The borough has seen a dramatic increase in cycling over the last few years which has resulted in several unofficial, unregulated tracks, jumps and routes across Council-owned land. Discussions have taken place regarding the opportunity to formalise some of these activities, specifically in relation to a BMX Pump Track. Potential locations include upgrades and an extension to a small facility at King George Playing Fields and a possible site within West Park, South Shields. Provision of a track would help to reduce damage to Council land and facilities whilst also improving both cycling and health provisions in South Tyneside.

Key Delivery Priorities

• Safer and Stronger Families in Healthier Communities
• Enterprise Learning and Skills
• Healthier Communities

The Local Authority Special Educational Needs Strategy and analysis of local data has identified a gap in provision for children and young people with Autism. The lack of additionally resourced provision means that children who are able to access mainstream classes are currently being placed in special schools or in out of borough provision. The Council is committed to increasing the number of additional resource based school places and reducing the over reliance on special school placements. Fellgate Primary School’s additional resource base caters for children with a diagnosis of Autism who have an Education Health and Care Plan. This project will see the conversion of unused shower/changing facilities into a Sensory Room and meeting/training room which will allow the current Sensory Room to be converted into a classroom creating an additional 7-10 places.

The Council recognises the importance of play for a child’s development and have identified the need to replace and upgrade the equipment in our existing playgrounds. This will be a phased project to carry out improvement works and replace equipment over a 5 year rolling programme. As part of this investment we will also look to install new accessible playground equipment for those users with disabilities to make playgrounds inclusive for all. Safety is also a priority at our playgrounds and, following the latest advice from The Royal Society for the Prevention of Accidents, we will be removing the traditional spring-mounted gates and replacing them with new, hydraulic, self-closing gates. These will provide a greater opportunity to regulate the closing speed of the gate and improve safety.

Innovation and Efficiency

We need to be clear about how we support and underpin the delivery of our priorities by investing in our future and managing our resources effectively. The current economic climate means that achieving value for money and efficiency in our services will be more important than ever. Our new operating model has a clear focus on delivery, and we are innovating and changing how we do things so we can deliver our priorities in the most efficient way.

Over the previous 3 years significant investment has been directed towards the replacement of the Council’s refuse collection fleet and 22 new refuse vehicles were delivered into the pool of 26 vehicles required to operate the service. New vehicles will mean less breakdowns and time out of service for repairs, and will ensure that waste services can be delivered on schedule to the benefit of our residents and businesses. In the next year, the Council will investigate the replacement of the remaining 4 refuse vehicles, embracing new technology and alternative fuels where possible. The programme going forward also allows for the replacement of much of the Highways heavy vehicle fleet and the Council’s light van stock. This fleet replacement programme covers 5 years and will prioritise the purchase of alternatively fuelled vehicles, where available and suitable, in order to reduce CO2 emissions both for the Council our customers. In addition, the Council has plans to invest in new gritters which, due to the nature of the usage of these vehicles, are particularly susceptible to problems arising from the salt in and around the vehicle. These will be replaced so as to maintain safety on our roads during the winter months.

To complement the new gritters the Council plans to construct a salt barn at the Middlefields depot. The salt used for winter gritting needs to be protected from the elements to avoid the chemical agents being watered down by rainwater or even washed away which can impact the salt quality, usability, effectiveness of treatments as well as environmental impacts. By constructing a salt barn, the Council can eliminate these adverse effects and produce revenue savings through reduction of leeching and better overall salt spreading control.

We will ensure that Council offices are fit-for-purpose and support the modern working practices that staff right across the Council workforce have become adapted to. A safe and welcoming office space suitable for a more flexible and agile work pattern will be created in South Shields Town Hall, with the aim of facilitating hybrid home/office working. This will include suitable work spaces, meeting rooms, meeting pods, collaborative working areas and quiet areas for breaks. In addition there will be upgrades to the external facilities at Middlefields to provide a safer and more user friendly site layout. Internally we will refurbish staff facilities with an upgrade to drying equipment for waste services operatives as well as updated fixtures and fittings, providing up-to-date energy efficiency facilities as well as a safe working environment for our staff.

The Capital Investment Programme outlined by priority and year is set out in the table below.

Capital Funding

The table below summarises our capital funding estimates for 2022/23 and provisional funding estimates for 2023/24 to 2026/27.

The Minimum Revenue Provision (MRP) is the charge made to the revenue account to reflect repayment of borrowing over the useful life of the assets that have been funded from that borrowing. The Council has regard to the guidance issued by the Secretary of State under section 21(1A) of the Local Government Act 2003 and any subsequent updates.

MRP is charged in the year following that in which an asset is brought into use.

MRP will be spread over a period which reflects the life/beneficial use of the asset and is normally no more than 50 years. A longer life may be given if it is deemed by a professional that the asset life will exceed 50 years.

These periods are determined for MRP purposes only, and the Council may account for depreciation of assets differently under the Code of Practice on Local Authority Accounting, after having had regard to the different conditions that apply for such accounting purposes.

The Council has in place a loan finance facility with South Tyneside Housing Venture Trust Limited. MRP will be charged to match the annuity loan repayment profile from the Company over the life of any loans issued as part of this agreement. Should the Council wish to switch the type of loan repayment profile to Equal Instalments of Principal then the Council reserve the right to do this. The Council also has a finance agreement with Centaurea Homes Limited. MRP will be charged in the year the loans are repaid and will match the value of the principal repayment. For any future finance agreements that the Council enters into, the MRP charged will be matched to the loan repayment profile, including for PFI and finance lease arrangements.

The Council also determines that available resources for financing capital expenditure, such as capital receipts and external funding, will be applied to new expenditures in a manner that is considered appropriate in any financial year. For example, it will be considered financially efficient to apply such resources in the first instance to expenditures that have a shorter estimated lifespan. Capital receipts may also be utilised to partially offset some or all of the MRP charge due for the year.

It is the Council’s intention to either apply housing receipts to appropriate capital schemes or to use them as a means of repaying debt, whichever is deemed more appropriate.

In cases where expenditure is incurred on only part of a scheme which is not completed by the year end, any grant or similar financing resources will be either allocated to other new expenditures or carried forward as appropriate. Final decisions regarding the manner in which such resources are to be allocated to schemes will be taken under delegated powers.

Over the medium term the Council faces continuing financial pressures as well as investment needs and has refocused its priorities and built challenging budget redirections and savings targets into the spending plans for 2022 to 2027. The Council carefully identifies the things that could go wrong and might undermine the MTFP.

To do this an assessment is made of what the impact would be if these things happen and how likely they are to happen. The Council ensures that it has plans in place in case things do not turn out as expected. This is part of our risk management strategy, which underpins all that we do, not just our financial plans.

The significant financial risks are identified on the Council’s strategic risk register. They have all been assessed as part of the strategic planning process. These risks are being actively managed and the estimated financial implications have been built into this Medium Term Financial Plan.

Some of our strategic risks have been assessed as particularly uncertain with a potentially significant financial impact. Reserves have been established for these risks.

The following table identifies the key risks to the delivery of the MTFP, the actions taken (within this financial plan) and the actions proposed to reduce the impact of these risks on the Council’s future financial position.

Our risk – based reserves policy

The Council aims to establish reserves based on financial risk and limit the use of reserves to support on-going spending. The policy is summarised below:

South Tyneside Council Reserves Policy

• General Reserve established to support future spending plans and one-off spending;
• Strategic Reserve is established to cover emergency events such as unforeseen financial liabilities or natural disasters. This reserve will be maintained at a minimum of 2% of the Council’s net revenue budget. This is the recommended minimum amount of reserves that should be retained by the Council as a contingency;
• Other Earmarked Reserves are held to meet possible shortfalls in the Council’s revenue budget from the reduction in Government funding expected over the coming years, managing the impact of our strategic financial risks materialising including the impact of Covid-19 and in particular to support the volatile demand led budgets in adult care and services for children as well as to fund the future cost of known liabilities e.g. insurance claims, payments due under PFI contracts and equal pay claims as well as funding new investment.
• School Reserves are cash balances held on behalf of schools;

The level of Council reserves is reviewed annually in line with CIPFA guidance on Local Authority Reserves and Balances (LAAP Bulletin 77 – November 2008). Now updated by LAAP bulletin 99

Our forecast of the Council reserves at 31st March 2022 is as shown in the table below.

The following table identifies the planned use of Council reserves during 2022/23 to 2026/27.

The Housing Revenue Account (HRA) is required to be maintained by councils who provide housing accommodation. It records the income and expenditure in relation to the management and maintenance of homes, and keeps this separate from other Council activity.

All rents collected are retained in this separate account; they support the management, day-to-day repairs and maintenance, and a capital investment programme which includes planned renewals, improvements to homes and major repairs.

South Tyneside Homes Limited have been delegated management of the housing service under the terms of a management agreement with the Council, approved by the Secretary of State under section 27 of the Housing Act 1985.

The Council retains a legal duty to set a budget, which avoids a deficit on the Housing Revenue Account, a duty which cannot be delegated. The Council also retains ownership of the homes, sets the level of rents and charges and is the landlord under the tenancy agreements.

The following table shows provisional HRA expenditure and income plans for the following 5 years.

Housing Revenue Plans for 2022/23

Rent levels are proposed to increase on average in line with government guidelines. Surpluses on the account will be set aside for future investment and to manage income risks arising from welfare reforms such as universal credit.

Service Charges for 2022/23

Service charges for 2022/23 will be as set out in Appendix 3.

The Council administers the Local Government Pension Scheme for the Tyne and Wear and Northumberland county areas and is responsible for agreeing the Pension Fund budget each year. The cost of the Pension Fund does not fall directly on the Council Taxpayer.

On 23rd September 2021 a £500k increase to the Pension Fund Budget was approved by Pensions Committee for Border to Coast to develop UK and Global property products. This increased the overall budget from £134.928m to £135.428m.

The table below summarises the spending plans for the Fund for 2022/23 and provisional spending plans for 2023/24 and 2024/25. This is due to be presented to the Pensions Committee for approval on 1st February 2022.

The budget for 2022/23 shows an increase of £24.296m over the revised 2021/22 budget. An increase of £14.243m is projected for 2023/24 and a decrease of £4.716m is projected for 2024/25.

Investment management expenses dominate the budget. This budget has been formulated in line with industry best practice and is a full estimate of the fees, expenses and costs associated with the investment management of the Fund.

The table below analyses the budget proposal for the next three years.

The increase in investment management expenses is attributed to increased costs related to private market investments which typically attract higher fees and expenses than quoted assets, but also have produced greater investment returns net of fees and expenses. The Fund is increasing its use of these type of investments over the next few years which is leading to increased fees and expenses for the first two years.

The Investment Management expenses line also includes the costs and expenses incurred in transacting the Fund’s assets. For the next two years, significant costs are expected to be incurred in moving assets to an investment management company, part owned by the Fund, called Border to Coast Pensions Partnership. This stems from a Government initiative whereby local government pension funds have been asked to combine their assets to create larger investment pools. As assets transfer to Border to Coast, costs are incurred. This however, is being offset by longer term savings and improved investment outcomes. By 2024/25 it is expected that most of the Fund’s assets will have transferred to Border to Coast and these costs will then fall out of the budget.

As in previous years the standstill pressure increases relate mainly to staffing costs and other inflationary increases included within contracts. However, in 2022/23, £0.201m has also been included as the budgeted increased net cost of purchasing a new seven year contract for pensions administration software. As the purchase cost is all being funded in 2022/23, this drops out of the budget again in 2023/24. There is a further material reduction in the standstill pressures, of circa £0.430m in 2023/24 as a result of Fund’s contribution to Border to Coast’s development and project costs reducing.

Most of the changes in the budget relate to regulatory changes, essential development or contractual inflation and as such they are included as standstill pressures. There are only small amendments for growth and savings over the three year budget period. The one exception to this is on the saving side where fees and expenses for reclaiming historic tax claims are expected to drop out of the budget in 2023/24, on the basis that these claims will be settled in 2022/23.

Shaped to Deliver

With our strategic and financial plans made, we track our performance over the year and compare it with what we planned to do. We do this from the start to ensure that we can take corrective action, if needed, to get back on target.

Our financial framework includes a robust corporate performance monitoring and reporting system. It ensures we regularly and comprehensively monitor financial performance at service and corporate level.

Leadership Teams receive a monthly financial monitoring report from the finance service which reviews capital and revenue spending, and identifies actions to ensure spending remains within budget.

Senior officers review financial reports at a monthly performance, improvement and monitoring meeting with reports presented quarterly to Cabinet. Progress in delivering agreed efficiencies is monitored monthly with meetings held between finance staff and senior officers.

Regular budget monitoring is an important financial control to ensure that spending during the year is in line with budgets agreed by the Council. Each service budget has a named budget holder responsible for managing the budget and real time access to expenditure and income data.

Budget Transfers

During the year, budget holders may need to transfer budgets from one service area to another to reflect changed service needs or priorities.

A budget transfer is defined as a movement of budget between any budget service line identified in Appendix 1A of this report.

Budget transfers between £100,000 and £250,000 must be discussed with the appropriate Cabinet Member(s) before a decision is taken by the responsible Director.

Budget transfers between £250,000 and £1,000,000 require the approval of Cabinet.

Budget transfers greater than £1,000,000 require the approval of full Council and must be proposed by Cabinet.

The table below identifies the external funding for the capital programme, the majority of which is secured or probable for the 2022/23 programme. For later years the majority of the funding has been classified as secured as it mainly relates to central government grants.

Capital Expenditure – Spending on the acquisition of property, plant and equipment or intangible asset, or which enhances the value of an existing asset. Other types of expenditure can be capitalised but only with the express permission of the Secretary of State.

Capital Receipts – These receipts are generated by the disposal of fixed assets. Part of the monies received from Right to Buy sales are paid over to Central Government. The remainder of the receipts generated both from Right to Buy and the sale of other assets can be retained by the Authority and used to finance capital expenditure or repay debt.

Collection Fund – Section 89 of the Local Government Act 1988 requires each Council with the power to raise Council Tax bills (a billing authority) to maintain a collection fund. Council Tax is held in this fund and it should be sufficient to cover expenditure relating to the precepts of the Tyne and Wear Fire and Civil Defence Authority and Northumbria Police and Crime Commissioner and the net expenditure of the billing authority, after taking account of Business Rate income and Government Grants.

Council Tax – The Local Government Finance Act 1992 introduced Council Tax with effect from 1st April 1993 and is based upon property values. There are eight valuation bands for chargeable dwellings ranging from Band “A” (the lowest valued properties) to Band “H” (the highest valued properties). The Council levies the tax based upon Band D properties; the actual charge will depend upon the banding of the individual dwelling – i.e. those properties in Bands A to C will pay less Council Tax whilst those in Bands E to H will pay more.

Dedicated Schools Grant (DSG) – A ring fenced grant of which the majority is used to fund individual school budgets.

Earmarked Reserves – Amounts set aside by the Council to meet future financial liabilities.

General Fund – The General Fund includes the expenditure and income relating to the services provided by the Authority but excluding the Housing Revenue Account activities. The net expenditure on the General Fund is compared to the charge levied upon the Collection Fund and results in a surplus or deficit that will increase or decrease the reserves of the Council.

Housing Revenue Account (HRA) – The provision, management and maintenance of Council house accommodation is required by law to be accounted for separately in a Housing Revenue Account. The account records the net cost that needs to be met by Council tenants. In general the Council cannot transfer sums between the General Fund and the Housing Revenue Account.

Medium Term Financial Plan (MTFP) – The process of identifying and aligning service pressure, corporate priorities and objectives as well as available resources over the medium term (5 years) and budgeting accordingly.

Minimum Revenue Provision (MRP) – The amount of money the Council must statutorily set aside in line with the MRP policy adopted by the Council as part of its Medium Term Financial Plan to support the repayment of debt.

National Non-Domestic Rates – Non-domestic properties must pay these Rates (NNDR) and they are based upon property valuations, as undertaken by the District Valuer, and a nationally set multiplier figure. The Local Authority is responsible for the collection of NNDR and keeps almost 50% of monies collected. The remaining element is paid to Central Government and repaid to Councils as a top-up grant to reflect individual spending requirements.

Precept – In the calculation of the Council Tax for a particular year, precepts levied by appropriate bodies must be taken into account. In the case of this Authority, the precepting bodies are Northumbria Police and Crime Commissioner, Tyne and Wear Fire and Civic Defence Authority and the borough council itself who all charge the Collection Fund with the estimated sums required to cover their net expenditure, in part or in entirety.

Private Finance Initiative (PFI) – A method of procuring assets and services over a longer term period, usually 25 years. The financial risks involved are usually shared between the Council and the PFI operator.

Reserves – Amounts set aside for purposes falling outside the definition of Provisions are considered as Reserves – expenditure is not charged direct to any Reserve.

Revenue Expenditure – Money spent on the day to day running costs of providing the various services. It is usually of a constantly recurring nature and produces no permanent asset.

Revenue Support Grant – A Government Grant in aid of Local Authority services generally. It is based upon the Government assessment of how much a Local Authority needs to spend to provide an average level of service.