Medium Term Financial Plan 2025 - 2030

Published March 2025 An accessible strategy document from southtyneside.gov.uk

Foreword by Leader of the Council

This Medium Term Financial Plan (MTFP) is our strategic financial plan incorporating the priorities for investment for the Council and the community.

We are now entering year three of our 20-year vision for South Tyneside to be a place where people live healthy, happy, and fulfilled lives.

We have a clear understanding of the challenges which the Borough faces such as high levels of child poverty and an ageing population which shape our budget proposals as well as the opportunities which are available.

As demand on services such as social care and the associated cost increases it leaves us with less money to spend elsewhere so the content of this Medium Term Financial Plan aligns with our Vision which identifies five core ‘Ambitions’ for residents which were directly influenced by people across South Tyneside through significant engagement. The ambition of targeting support to make things fairer underpins everything we do and is a fundamental driver to our financial decision making.

Our Ambitions

We have five ‘Ambitions’ – the things we want to achieve over the next 20 years to help deliver our Vision. These five Ambitions will guide everything we do.

We want all people in South Tyneside to be:

Financially Secure

Residents will be financially secure. They will have what they need for a good standard of living.

Healthy and Well

Residents will enjoy good mental and physical health throughout their lives. They will have the best start in life and be able to age well.

Connected to jobs

Residents will have access to jobs, skills, and learning. They will have the skills and confidence to apply for a wide range of quality local jobs. These jobs will be in key and growing areas of employment and benefit all our borough.

Part of strong communities

Residents will live in clean, green, and connected communties where they feel safe.

And we want these things for every resident, so we are committed to:

Targeting support to make things fairer

We will target support at the residents and parts of our borough that need it the most, reducing inequalities and making things fairer.

As a Council, setting a balanced budget is one of the most difficult but important responsibilities we have. Each year, we weigh up pressures including increased demand for services, the adequacy of central government funding, and competing commitments, priorities, and ambitions, all things we know are incredibly important to our residents and communities.

Our Medium Term Financial Plan outlines how our energy and resources are focused on tackling the biggest and most fundamental issues facing residents who are most in need, placing people at the heart of everything we do. We target our resources and support at the residents and parts of the Borough that need it the most in a bid to reduce inequalities and make things fairer whilst still continuing to deliver the hundreds of day-to-day services. These include supporting those in need or families in crisis to collecting household waste, maintaining roads and footpaths as well as keeping parks and beaches clean and accessible.

We know that our residents continue to face financial pressures due to the cost of living. Council support services have continued to help thousands across South Tyneside, and we work hand in hand with the Borough’s voluntary sector, signposting to outreach networks. We continue to make difficult decisions to do what we can to support residents and businesses in the Borough, working together to reshape our services to ensure that they are sustainable.

We’ve worked to make sure that services are accessible whilst recovering some of the rising costs incurred. We’ve retained subsidies in as many areas as possible for those that need our support the most such as school meals, milk and concessionary leisure charges. We've kept costs as low as possible and will continue to subsidise as many services as possible as our resources allow.

As an organisation we continue our journey for real transformational change with a focus on prevention and early intervention to reduce the need for acute services and support, income generation and commercialisation to create sustainable services, the modernisation of our ways of working using the latest technologies and the use of insights data about the state of the Borough to approach the challenges we have ahead.

As we look to set the budget for 2025/26, we do so in a challenging financial landscape. This has meant having to take some difficult decisions. After over a decade of austerity we are a leaner organisation but with over 40% of our funding cut after taking account of inflation and a 30% reduction in staff numbers since 2010, we continue to incorporate learning from the challenges we have faced to create efficiencies and get best value for money. Innovation in the use of technology and more agile ways of delivering services will be embedded into our future plans as we look to redesign our delivery working with residents and businesses.

Our services protect those in need and deliver essential services, but we also provide support to older people, people with a range of disabilities and looked after children in care.

On top of delivering our critical day to day services, we have pressed forward with some fantastic projects and service improvements that are really beginning to make the difference for our residents. We have already invested in council assets right across the Borough - the infrastructure and facilities upon which many of you rely so heavily.

We have invested in leisure facilities, roads, footpaths, accessible equipment, housing stock and award - winning renewable energy schemes that reduce our carbon emissions because we know these things matter to residents.

We have been successful in attracting millions of pounds of external funding for the Borough including £20m from the third round of the Levelling Up Fund and a further £20m for Jarrow from the Long-Term Plan for Towns fund. The Borough has also been named a Levelling Up Partnership Area. We will continue to do everything we can to attract external funding to South Tyneside to realise our future ambitions and continue to press for a fairer funding settlement from Government, which have given an early indication for a more positive distribution of resources to areas such as South Tyneside in the future.

Continuing pressures in adult and children's social care are not new and is also reflected across the region and nationally. However, they continue to grow despite the amazing efforts we are taking to work with service users to coproduce and redesign our services. The cost of adults and children's social care accounts for 70% of the council's discretionary budget so balancing the budget and protecting essential services is harder than ever before. That is why we are investing in two new extra care accommodation schemes across the Borough and two independent supported living schemes for those residents who may need additional help to live independently in the community. Two of these adult social care accommodation schemes are already nearing completion and will welcome their first residents in 2025. Alongside these, new residential children’s homes have started on site and will be completed in 2025, increasing the number of placements in South Tyneside for looked-after children and young people who otherwise may have to live far away from South Tyneside which can cause further disruption to their lives. By investing where we need it most, we will look to bring down some of our social care costs in the future.

Our role as part of the North-East Combined Authority means that we are doing all we can to leverage any funding opportunities available to us to bring forward transformational projects for South Tyneside, taking every opportunity to pull in additional investment above and beyond our core Council funding.

Despite ongoing financial pressures, with this year’s Medium Term Financial Plan, we have continued to listen to residents and businesses, considered the evidence underpinning our decision making and aligned our resources to our 20-year vision and ambitions. We have set a balanced budget that continues delivery of our transformational projects for the future whilst investing to support residents in the challenges they face today.

Councillor Tracey Dixon Leader of the Council

Financial Context

Introduction from the Lead Member Governance, Finance & Corporate Services, Cllr Jane Carter

Medium Term financial planning is a key part of South Tyneside’s policy and budget framework. Driven by our South Tyneside Council Strategy and the ambitions within it, it sets out our strategic approach to the management of our finances, within which delivery of our priorities will be progressed.

Like all local authorities, South Tyneside Council operates within a framework of statutory obligations that are shaped by wider political and legislative powers. This document covers the period 2025-26 to 2029-30 and is subject to annual review. This helps to ensure our financial planning is responsive to changing national and local factors, considering emerging risks and to protect our financial health. This document also sets the Council’s budget for 2025-26.

Wider factors which influence what we can deliver

National legislation

For example, introduction of new local responsibilities or changing relationships such as with schools or health partners

Funding decided at a national level

Including funding pots which areas must compete for, or changes to business rates or council tax affecting expected revenue

Economic environment

Including rising inflation, impacting on energy bills, staff wages and goods and services

Societal changes

Including new technology and changing global priorities, such as around climate action, the shift to increasingly remote working, or political conflicts

National policy and guidance

For example new inspection frameworks or standards

The different powers and functions devolved to different levels of government

For example around skills or transport

Changes in demand

For example an aging population meaning a greater number of residents requiring support to live independently, or a birth rate increase meaning more nursery or school places

Our key financial planning principles are:

  • Financial sustainability over the long and short-term
  • Planning over multi-year horizon
  • Alignment of decisions with Strategic Priorities
  • Availability of investment and savings choices which are clear and transparent
  • Explicit linkages between capital budgets and revenue investment / costs
  • Risk mitigation against existing and emerging macro cost pressures

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:

  • Manage 550km of road and 1700km footway
  • Welcome 6.446m visitors to the Borough
  • Support over 22,268 children in their nursery, primary and secondary education
  • Handle over 300,000 customer contacts
  • Process over 60,000 benefit applications and changes
  • Manage over 16,000 Council homes
  • Process 730 planning applications
  • Empty 6.5m bins
  • Inspect 600 food outlets
  • Process 3,100 licenses and permits
  • Manage over 140 industrial units
  • Support 2,500 to access assistive technology to remain independent
  • Respond to 21,000 new adult social care contacts
  • Support 3,500 adult learners
  • Manage 2,000 referrals to Children’s Social Care
  • Support 2,800 ‘in need’ children and young people (including children in care or on a child protection plan or care leavers) with approximately 1,500 open at any point during the year
  • Maintain 70,000 trees
  • Host 1.5m admissions to Council leisure facilities
  • Support 4,300 individuals with special educational needs
  • Cut 641 hectares of grass
Councillor Jane Carter Lead Member Governance, Finance & Corporate Services

Financial Challenge

These are seriously challenging times for local people, businesses and for local councils. Across the country, councils are grappling with balancing budgets and keeping frontline services going. Despite recent falls in inflation back to pre-pandemic levels, cost-of-living continues to be clearly and understandably at the forefront of people’s minds and a key focus for the Council whilst also dealing with rises in demand for our services.

These factors coupled with increases in demand for Adults and Children’s social care post pandemic and the increased costs of these services means that the Council needs to spend more money to continue to deliver our current services. The Government has recently established an independent commission to transform adult social care which will consider the formation of a National Care Service. This is not due to be fully completed until 2028 and therefore no substantial changes to funding arrangements for adult social care are expected in the short-term. Recent Central Government announcements including the recent provisional settlement and economic forecasts indicate that future funding for councils within the lifetime of this parliament will remain very tight.

We continue to adapt to our evolving circumstances and explore new and different ways to deliver our services in the context of a limited core Government grant which has resulted in our total annual revenue resources reducing significantly in real terms since 2010 by in excess of £100m. We also review our comparative spending levels with other authorities by reference to tools such as the Chartered Institute of Public Finance and Accountancy (CIPFA) Resilience Index. A series of one-year financial settlements from Central Government makes taking a long-term view of services and finances extremely difficult, but we are hopeful that the new Government’s intention to move towards a longer-term funding settlement from 2026/27 onwards will allow us to take a much more informed and longer-term approach to our financial planning.

The Council receives 61% of its income from Council taxpayers, retained business rates and use of reserves. Previous cuts to Central Government funding and demand pressures have meant that councils now rely significantly more on local tax revenues for their overall funding. The budget has been calculated incorporating an increase of 4.95% in Council Tax for 2025/26. 2% of this increase relates to the adult social care levy contributing towards the funding gap within Adult Social Care services.

Assessing Potential Impacts

Councils have a duty under the requirements of the Equality Act 2010 to consider the impact of their decisions on people with ‘protected characteristics’. There are nine protected characteristics identified by the Act: age, disability, gender reassignment and identity, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation.

We are committed to embracing the principles of equality, diversity, inclusion and belonging (EDIB) in everything that we do. For example, we have an elected member portfolio and lead, an elected member champion to promote the principles of EDIB, established clear equality objectives, re-affirmed our commitment against racism by formally signing an Anti-Racism charter and celebrated the local LGBTQIA+ community through a series of inclusive events. We have also agreed an EDIB strategy and action plan.

We have also taken steps to increase and positively acknowledge the diversity within our workforce through a number of staff collaborative forums as well as an ongoing survey to better understand the characteristics of our workforce. A strengthened training and development offer to support managers and staff in understanding and awareness of EDIB issues has also been introduced.

As part of setting our budget we carry out Equality Impact Assessments (EIAs) of proposals that will result in a change to services or policies in the next financial year to understand the impact of these changes on our population and to make sure we do not discriminate against individuals or groups. This will support us in making fair, transparent and evidence based decisions.

Sustainability

We are committed to supporting a sustainable Borough which deals with the challenges of climate change. The Council agreed a strategic plan, “Sustainable South Tyneside 2020-25” to move towards a carbon neutral future and we will be refreshing the strategy in the forthcoming year. The Council continues to lead the Sustainable South Tyneside agenda, mobilising investment and delivering a range of projects to reduce greenhouse gas emissions from the Council’s operational activities. Major projects include investment in renewable energy schemes across the Borough which will significantly cut carbon emissions whilst providing heating and electricity to a number of buildings. We are also delivering the Stronger Shores project with nature-based solutions which will help protect against coastal erosion and flooding.

We are supporting awareness and behavioural change around climate change, promoting a shift towards sustainable and active modes of transport. This includes adoption of a hybrid working policy within the Council which has reduced emissions from fewer private car journeys. We are also investing in greater electrification of our own vehicle fleet and continuing the replacement of street lighting with energy efficient LED bulbs.

Revenue Budget

How we Fund our Budget

The table below sets out the Council’s forecast level of funding for the period 2025-26 to 2029-30. The table indicates that the Council has four main sources of funding; government grants, council tax, business rates and council reserves.

Forecast level of funding for 2025/26 to 2029/30
2025/26 2026/27 2027/28 2028/29 2029/30
Government Funding
Revenue Support Grant 18.867 19.338 19.774 20.159 20.583
Business Rates Top Up 38.555 39.519 40.349 41.196 42.061
Recovery Grant 5.940 5.940 5.940 5.940 5.940
Subtotal Government Funding 63.362 64.797 66.033 67.295 68.584
Collection Fund
Council tax 79.951 83.941 88.088 92.399 95.995
Retained business rates 15.723 16.037 16.358 16.685 17.019
Collection Fund Contribution 1.420 0.950 0.200 0.200 -
Subtotal collection fund 97.094 100.928 104.646 109.284 113.014
Use of reserves
General use of reserves 1.311 (2.529) (2.117) (3.249) (2.513)
Subtotal use of reserves 1.311 (2.529) (2.117) (3.249) (2.513)
Total general fund budget 161.767 163.196 168.562 173.330 179.085

Government Funding

The Local Government Finance Settlement announced in December 2024 only provided confirmation of funding for 2025/26.

The provisional settlement was announced on 18 December 2024, followed by the final settlement on 5 February 2025. Our core spending power will increase from £197.5m to £213.8m, an increase of 8.3%, which compares with an all-England average of 6.0%. This includes:

  • Settlement Funding Assessment increase from £71.8m to £72.8m, an increase of 1.3%. The increase of £1m relates to:
    1. The Revenue Support Grant (RSG), which will increase from £18.5m to £18.9m, an increase of 2.1%;
    2. Baseline Funding Level, which is the Government’s notional measure of business rates income due to councils and incorporates the Business rates Top-Up Grant has increased from £53.3m to £53.9m, an increase of 1.1%.
  • Local Authority Better Care Grant, which is a combination of the Improved Better Care Fund and Discharge Fund grant rolled into one, will remain at £12.9m for 2025/26, the same as received in 2024/25.
  • New Homes Bonus will increase from £0.011m to £0.041m, an increase of 290% compared to an all-England average reduction of 0.3%. This is due to an increase in the number of new and affordable homes delivered in the Borough in 2024 compared to 2023 although it is still relatively small in overall value.
  • Social Care Grant will increase from £22.011m to £26.221m, an increase of 19.1% compared with an all-England average increase of 17.4%.
  • A new Children’s Social Care Prevention Grant was announced as part of the provisional settlement totalling £250m for England, with South Tyneside receiving £1.071m of that total. The grant is distributed on a new formula to allocate funding according to estimated need for children’s social care services.
  • A new one-year Recovery Grant was announced as part of the settlement totalling £600m for England, with South Tyneside receiving £5.940m of that total. The grant is to be distributed to places where, weighted by population, deprivation outweighs council tax raising ability, with South Tyneside being one of those such areas.
  • Market Sustainability and Fair Cost of Care Grant has remained at £4.004m for 2025/26, the same as received in 2024/25.
  • Government assumption that council tax will increase by 5.0%.

Council Tax

Section 30 of the Local Government Act 1992 requires the Council to set an amount of council tax for each financial year for each category of dwellings in its area.

A council tax bill is made up of several different charges. Alongside the charge to fund council services, which is inclusive of levies from external bodies to support functions such as transport and flood defence, 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 2% increase in respect of Adult Social Care and a 2.95% general annual increase. Due to the pressures within Adult Social Care, there will still remain a significant funding gap.

The amount payable for dwellings in different valuation bands is calculated using the following proportions for each valuation banding:

Valuation band
A 6/9
B 7/9
C 8/9
D 9/9
E 11/9
F 13/9
G 15/9
H 18/9

Thus giving the following council tax amounts for the South Tyneside area (including a 2% precept to fund adult social care but excluding other precepts).

Valuation band South Tyneside Council (£)
A 1,343.49
B 1,567.40
C 1,791.32
D 2,015.23
E 2,463.06
F 2,910.89
G 3,358.72
H 4,030.46

To these must be added the precepts of Tyne & Wear Fire and Civil Defence Authority and the Northumbria Police and Crime Commissioner. At this stage, we have not received the final notification of the agreed precepts for the Tyne and Wear Fire and Civil Defence Authority and the Northumbria Police and Crime Commissioner for 2025/26, therefore we have calculated increases of £5.00 and £14.00 respectively based on the indicative increase still to be agreed from Tyne and Wear Fire and Civil Defence Authority, and the maximum increases permitted without holding a referendum for Northumbria Police and Crime Commissioner. The final, confirmed precepts are expected to be known by the time Council meets on 27 February 2025. Should the actual precepts differ from the estimates provided, Cabinet budget recommendations to Council will be updated to reflect any change.

Valuation band Tyne & Wear Fire and Civil Defence Authority (£) Northumbria Police & Crime Commissioner (£)
A 66.74 130.56
B 77.86 152.32
C 88.99 174.08
D 100.11 195.84
E 122.36 239.96
F 144.60 282.88
G 166.85 326.40
H 200.22 391.68

These result in the following tax amounts (including precepts):

Valuation band South Tyneside Council (£)
A 1,540.79
B 1,797.58
C 2,054.39
D 2,311.18
E 2,824.78
F 3,338.37
G 3,851.97
H 4,622.36

Retained Business Rates

The Council collects Business Rates in the Borough and keeps 50% of the collected rates income. The other 50% is passed to Central Government which is then distributed back to councils as a top-up grant to reflect individual spending requirements.

Council Reserves

The Council aims to establish reserves based on financial risk and limit the use of reserves to support on-going spending. More detail on our risks and reserves held is shown in Chapter 3.

Budget Pressures and Investment

Priority Investment

Our investment choices are guided by our strategic risks. For example, we are investing in Local Area Co-ordination capacity to support residents at an early stage reducing the likelihood of someone becoming dependent, recognising the significant risk of additional costs from increased demand in Adult Social Care, as well as financial risks around inflation, energy prices etc.

Work continues to further align our resources to achieve our priorities and to generate future savings through our five-year budget planning process.

A list of the priority investment for 2025/26 is shown in the table below:

Priority Investment for 2025/26
Title Directorate Amount (£m)
Local Area Co-ordination Adult Social Care & Commissioning 0.110
Subject Access Request Adult Social Care & Commissioning 0.090
Total Priority Investment 0.200

Inflationary and Standstill Pressures

Price inflation is currently reducing from a historical high of 11% at the beginning of 2023/24 to around 2.5% currently. Many of our contracts are linked to various inflation factors in the Consumer Price Index, including the national living wage. Demands upon adults and children's social care continue to increase significantly. This means that the Council must spend considerably more just to continue providing the same services albeit costs will be mitigated in the longer term through service transformation across social care. A list of the standstill pressures for 2025/26 and estimates for 2026/27 to 2029/30 is shown in the table below:

Revenue Standstill Pressures
2025/26 2026/27 2027/28 2028/29 2029/30
Inflation
Cost of living increase 3.878 2.838 2.651 2.707 2.707
Net inflation on prices and income 5.849 2.709 4.426 3.973 3.971
Subtotal inflation 9.727 5.547 7.077 6.680 6.678
Other pressures
Adult Services Demographic Pressures 1.500 1.500 1.500 1.500 1.500
Children's Services Demand Pressures 6.000 2.000 - - -
Forecasted Pressures 5.537 1.030 1.500 1.000 1.000
Subtotal Other Pressures 13.037 4.530 3.000 2.500 2.500
Changes to External Grant
Changes in External Funding 0.154 (0.400) (0.400) (0.400) (0.400)
Subtotal Changes to External Grant 0.154 (0.400) (0.400) (0.400) (0.400)
Total Revenue Standstill Pressures 22.918 9.677 9.677 8.780 8.778

Summary Medium Term Financial Position

Taking into consideration our funding, priority investment and standstill pressures, the table below gives a summary of our medium-term financial position for 2025/26 to 2029/30.

Medium-term financial position for 2024/25 to 2028/29
2025/26 2026/27 2027/28 2028/29 2029/30
Base budget 157.532 161.767 163.196 168.562 173.330
Priority investment 0.200 - - - -
Standstill pressures 22.918 9.677 9.677 8.780 8.778
Funding Available (161.767) (163.196) (168.562) (173.330) (179.085)
Budget gap 18.883 8.248 4.311 4.012 3.023
To be addressed by
Specific grants (5.839) (1.248) (0.811) (0.512) (0.523)
Service efficiencies (13.044) (7.000) (3.500) (3.500) (2.500)

The diagram below shows our revenue budget for 2025/26 by Directorate. Appendix 1 provides more detail on the 2025/26 budgets for each service. Housing services to council tenants are shown separately in Chapter 4 (Housing Revenue Account).

Revenue budget for 2025/26 by Directorate
Directorate 2025/26 Budget
Adult Social Care and Comissioning 74.631
Children's Social Care, Education, SEND and Inclusion 58.477
Public Health 15.018
Place Strategy 27.832
Community Operations 4.577
Business and Resources 25.765
Governance and Corporate Affairs 7.447

Budget Savings

The funding we estimate to receive from Central Government and from council tax payers over the next five years is insufficient 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 and ambitions, we have identified proposals for reducing spending, generating income and increasing efficiency across all of the Council's services for 2025/26. This will mean that our spending plans are affordable and match the money we expect to receive. Further work will be required to address funding gaps from 2026/27 onwards as we will need to spend more to maintain existing levels of services.

The proposals are led by the ‘Our Council’ Transformation Programme, which focuses on the major and prioritised programmes of change which will have significant financial, policy or strategic implications for the Council and Borough. There are four major programme workstreams (Prevention, Commercial, Modern-fit-for-purpose Council, and Evidence & Engagement) which are led by a programme sponsor and a separate programme board, reporting into an overarching Transformation Board. The Transformation Board is the focal point for facilitating collaborative activity around public service reforms whilst managing risk, which will underpin the Council's financial sustainability in the medium term to assist in closing the projected financial gap within the Medium Term Financial Plan.

Plans for reducing spending, delivering new models of service, additional income and increasing efficiency in 2025/26 are shown in the following table.

Budget savings
Budget Savings 2025/26 Amount £m
Adult Social Services & Commissioning
Use of Technology 0.300
Review of double handed care requirements 0.350
Reduction in Independent Supported Living Costs 0.750
Rationalisation of Learning Disability provision 0.200
Review of Help To Live At Home costs 0.400
Reduced Residential Care demand through Help to Live at Home and Extra Care 0.500
Rationalisation of 1:1 support in Residential Care placements 0.100
Shared Lives expansion 0.400
Reduction of posts across Directorate 0.350
Client contributions review 1.000
Collaborative system diagnostic 1.000
Subtotal Adult Social Services & Commissioning 5.350
Business and Resources
Recovery of Business Rates court costs 0.100
Revenue contribution to ICT capital programme reduction 0.200
Increased Supplier Incentive Scheme income 0.100
Increased Contract Rebate income 0.100
Modern Fit For Purpose Transformation Workstream efficiency savings 0.170
Historic Enhanced Pension payment reductions 0.100
Additional investment interest 0.070
Banking / payment charges savings 0.030
Corporate training 0.050
Reduction of posts across Digital & ICT, Finance, People & Organisational Change and Procurement 0.240
Reduction of posts through vacancy management - Council Wide 1.063
Libraries - reduction of posts / vacancies 0.060
Review of contributions to third parties 0.040
Additional Leisure income 0.400
Subtotal Business and Resources 2.723
Children's Services
In-House Fostering development 0.300
In-House Residential Capacity 0.400
Children with Disabilities Services review 0.100
Reduced number of young people requiring a care episode 0.300
School Meals Charges review 0.415
Review of Children's Day Care provision 0.254
Review of Family Hub model 0.588
School Improvement and SEND project support review 0.135
Home to School Transport review 0.104
Subtotal Children's Services 2.596
Public Health
Public Health commissioned contracts review 0.152
Subtotal Public Health 0.152
Place Strategy
Energy costs reduction 0.300
Waste Disposal tonnages reduction 0.200
Building Cleaning review 0.200
Public Protection and Planning efficiency savings 0.030
Increase in commercial lettings 0.050
Self-financing of business centres 0.111
Increased self-financing of Community Associations 0.055
Reduction in posts across Housing & Assets, Investment & Growth and Public Protection 0.195
Subtotal Place Strategy 1.500
Community Operations
Fees and Charges changes 0.060
Grounds Maintenance service review 0.260
Weed Management efficiencies 0.060
Transport income generation 0.031
Re-organisation of Street Scene 0.100
Re-organisation of Handy Estates 0.127
Subtotal Community Operations 0.638
Governance & Corporate Affairs
Management & Structure Review Governance & Corporate Affairs 0.200
Re-organisation of Events 0.031
Reduction of posts across Directorate 0.128
Reduction in printing for Council and Committee meetings 0.050
Reduction in catering for Council meetings and events 0.005
Revised approach to public notices 0.030
Subtotal Governance & Corporate Affairs 0.444
Total savings 13.044

Equality Impact Assessment of Budget Savings

The Council has a legal duty to set a balanced budget each year. To meet our responsibilities to the Equality Act 2010 and the Public Sector Equality Duty, we carry out Equality Impact Assessments (EqIAs) for all our budget savings proposals to ensure that the potential effects of decisions on those protected by equality legislation are considered prior to any decision being made. These are documented where an impact arises.

There are nine protected characteristics under the Equality Act 2010 that we must consider:

  • Age
  • Disability
  • Sex
  • Sexual Orientation
  • Gender Reassignment
  • Marriage or Civil Partnership
  • Pregnancy & Maternity
  • Race (including colour, ethnicity, nationality or national origin)
  • Religion or belief

The Council has also extended the scope of EqIA’s to include a further three groups which we have identified in line with our Ambitions and Strategy:

  • Care experienced individuals
  • Armed Forces Veterans
  • Those at risk of socio-economic disadvantage

The EqIA aims to identify and assess the potential impact of a decision where it identifies a disproportionate change to services for those groups with protected characteristics, and to identify any mitigation that is to be implemented to reduce or remove the disproportionate impact on those impacted.

There are a number of EqIAs for proposals that will potentially impact on services and polices for protected groups in 2025/2026. A summary of the findings from the assessment of all the budget savings proposals and where applicable individual detailed EqIAs are included in Appendix 6.

Dedicated Schools Grant (DSG)

The Council will receive £189.173m (£170.785m 2024/25) Dedicated Schools Grant (DSG) in 2025/26 which is ringfenced for the education of children. From this amount the Department for Education (DfE) will recoup the funding for academies in South Tyneside and external commissioned High Needs places, which is estimated to be £59.556m (£53.277m 2024/25).

DSG is allocated over four blocks of funding. Local authorities can only switch resources between blocks with the permission of the Schools Forum and / or Secretary of State. The four blocks through which DSG is allocated consists of:

  • Schools block covering provision in mainstream schools from Reception to Year 11. The 2025/26 notified allocation is £131.916m (£123.174m 2024/25) before recoupment.
  • Central Services Schools block which covers commitments such as admissions and certain prescribed statutory and regulatory duties. The 2025/26 notified allocation is £1.639m (£1.741m 2024/25).
  • Early Years block covering nursery schools, nursery classes and Private Voluntary and Independent sector providers of early years provision (PVIs). The 2025/26 notified allocation is £22.749m (£15.891m 2024/25).
  • High Needs block covering pupils with high needs - defined by the DfE as those requiring provision costing in excess of a given threshold. The 2025/26 notified allocation is £32.869m (£29.979m 2024/25) before recoupment.

Risks & Reserves

Risk Assessment

Over the medium-term the Council faces continuing financial pressures as well as investment needs and has refocused its priorities and built budget redirections and savings targets into the spending plans for 2025 to 2030. 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 MTFP.

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.

Strategic Finance Risk and Risk Management

Risk to the delivery of the MTFP Risk managed by: Risk rating
Risk that the demand for services (adults and children) could increase further than estimated and that the volatile demand led budgets are not rigorously managed. Revenue spending is monitored on a monthly basis as part of the Council’s corporate performance monitoring framework. Strategies to support independence, choice, early intervention and sustainability have been developed and are being implemented. High
Risk that the funding required to meet external inspection standards across adults and children’s social care is insufficient. Transformation programme in place across adult social care. Multi-agency improvement board in place for children’s social care and work with regional DfE lead for improved resources. High
Risk that inflation, interest rates, energy prices etc do not stabilise in the medium to long term. Regular monitoring of the MTFP and reporting to Cabinet/ Borough Council to identify and understand inflationary and other cost pressures. Regular review of capital financing requirements. Medium
Risk that the Council is unable to align its resources to its ambitions. Collaborative approach to budget and service planning ensures that any new investment / savings decisions are assessed against delivery of the Council ambitions. Medium
The Council is unable to deliver its financial plans. The achievement of the MTFP is imperative and is monitored every month as part of our performance monitoring process incorporating challenge to budget holders and corporate oversight. Medium
Future Government plans to revise the system of funding for Local Government may result in a reduction in resources greater than already forecast. Future changes to the funding system will be analysed and the impact on resources will be factored into the MTFP. With partners we are campaigning for fair funding. Medium
The cost of commissioned care may increase due to the national living wage and inflationary pressures. The Council has anticipated cost pressures in this area within its financial plans. Medium
Financial pressures and demands associated with the national health service resulting in additional social care costs. Integrated working with health partners across the whole system of health and social care is embedded. Medium
Uncertainty over the future funding of the capital programme. We maximise the availability of capital receipts and external funding to support the capital programme thereby reducing the call on Council borrowing. Affordability of borrowing is regularly assessed and monitored. Medium
Emergency event occurs e.g. major flooding incident / loss of ICT systems / significant traffic incident / flu pandemic which incurs additional unbudgeted costs and loss of income. The Council has robust systems in place for emergency events and business continuity. The Council maintains a Strategic Reserve and insurance reserves to meet unforeseen liabilities. Medium

Planned Use of Reserves

The level of Council reserves is reviewed annually in line with CIPFA guidance. Our Reserves Policy is shown at Appendix 2.

Our forecast Use of Council reserves is shown in the table below.

Forecast use of Council reserves
Council Reserves Unearmarked General Fund Reserve Future Funding Reserve Earmarked Reserves Total Reserves
£m £m £m £m
Estimated balance as at 31st March 2025 6.764 0.587 15.160 22.511
Planned use of reserves in 2025/26 (0.655) - (2.076) (2.731)
Estimated balance as at 31st March 2026 6.109 0.587 13.084 19.780
Estimated balance as at 31st March 2026 6.109 0.587 13.084 19.780
Planned use of reserves in 2026/27 1.265 - 0.315 1.580
Estimated balance as at 31st March 2027 7.374 0.587 13.399 21.360
Estimated balance as at 31st March 2027 7.374 0.587 13.399 21.360
Planned use of reserves in 2027/28 1.059 - 0.859 1.918
Estimated Balance as at 31st March 2028 8.433 0.587 14.258 23.278
Estimated balance as at 31st March 2028 8.433 0.587 14.258 23.278
Planned use of reserves in 2028/29 1.625 - 1.425 3.050
Estimated Balance as at 31st March 2029 10.058 0.587 15.683 26.328
Estimated balance as at 31st March 2029 10.058 0.587 15.683 26.328
Planned use of reserves in 2029/30 2.513 - - 2.513
Estimated Balance as at 31st March 2030 12.571 0.587 15.683 28.841

Housing Revenue Account

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.

The Council has a legal duty to set a budget, which avoids an unplanned deficit on the Housing Revenue Account, sets the level of rents and charges and is landlord under the tenancy agreements.

The following table shows the budget for 2025/26 and the provisional HRA expenditure and income plans for 2026/27 to 2029/30.

HRA expenditure and income plans
Housing Revenue Account Budget Provisional budget
2025/26 2026/27 2027/28 2028/29 2029/30
£m £m £m £m £m
Expenditure
Management 19.713 20.335 20.784 21.248 21.717
Repairs & Maintenance 19.543 19.935 20.334 20.741 21.156
Rents, Rates, Taxes, Insurance 2.794 2.865 2.932 3.001 3.072
Provision for Bad Debts 0.304 0.309 0.316 0.322 0.329
Capital Programme Investment 29.966 29.964 29.965 29.971 29.980
Debt charges 10.354 10.359 10.364 10.369 10.374
Other Capital Charges 0.057 0.058 0.059 0.060 0.061
Total Housing Revenue Account Expenditure 82.731 83.825 84.754 85.712 86.689
Income
Rents - Dwellings (74.143) (75.621) (77.122) (78.645) (80.190)
Income - Other services/property (3.709) (3.796) (3.884) (3.976) (4.068)
Contributions & interest (1.598) (1.626) (1.655) (1.683) (1.713)
Total Housing Revenue Account Income (79.450) (81.043) (82.661) (84.304) (85.971)
(Surplus) / Deficit on Housing Revenue Account 3.281 2.782 2.093 1.408 0.718

Housing Revenue Plans for 2025/26

Rent levels are proposed to increase on average by 2.7% in line with Government guidelines and partial adoption of the flexible Government rent standard. Reserves are planned to be prudently applied in the next few years to support the Housing Capital Programme.

Service Charges for 2025/26

Most service charges for 2024/25 are proposed to be increased by 1.7% as set out in Appendix 3.

Tyne & Wear Pension Fund

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.

The table below summarises the spending plans for the Fund for 2025/26 and provisional spending plans for 2026/27 and 2027/28. This was approved by the Pensions Committee on 28thJanuary 2025.

Spending plans for the Fund
Budget Tyne and Wear Pension Fund Budget Provisional Budgets
2024/25 2025/26 2026/27 2027/28
£m £m £m £m
207.178 Investment Management Expenses 222.707 233.617 248.685
1.499 Investment Office 1.428 1.426 1.433
208.677 Total Investment Office 224.135 235.043 250.118
4.437 Pensions Office 4.791 4.900 4.746
1.100 Governance and Funding Office 1.162 1.093 1.120
214.124 Total Pensions Service 230.088 241.036 255.984

The budget for 2025/26 shows an increase of £15.964m over the 2024/25 budget. Further increases are projected of £10.948m in 2025/26 and £14.948m in 2026/27.

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.

Budget proposal for 2023/26
2025/26 2026/27 2027/28
£m £m £m
Base Budget 214.124 230.088 241.036
Investment Management Expenses 15.529 10.910 15.068
Standstill Pressures 0.335 0.132 0.160
Budget Growth/New Initiatives 0.476 0.440 0.154
Savings (0.376) (0.534) (0.434)
Revised Budget 230.088 241.036 255.984

The increase in investment management expenses is attributed to increased allocations 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 continues to increase its use of these type of investments which is projected to lead to a material increase in fees and expenses over the coming years.

The Investment Management expenses line also includes the costs and expenses incurred in transacting the Fund’s assets. For the next year, 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 Central Government directive whereby Local Government Pension Scheme 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 expected to be offset by longer term savings and improved investment outcomes. By 2025/26, 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. 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. In 2025/26, there is pressure on the Actuary budget from being a valuation year. There is also the impact of increased employers National Insurance (£0.074m).

The growth in the IT budget mainly relates to SQL conversion (£0.215m) which will reduce dependence on network servers and increase resilience. There is also an increase of seven posts in pensions administration staff (£0.242m). These are needed to meet the growing demands on the service with increasingly complex pensions processing following legislative changes. The additional staff will improve service delivery and resilience. In 2026/27 there is budget for testing AVC suitability of £0.026m in addition to the £0.413m growth in IT budget which mainly relates to a hosted solution and automated payroll which will improve resilience and efficiency of operations.

There have been a number of savings identified. The transfer of the direct property portfolio to Border to Coast has led to the reduction of one post in legal staff who supported this activity and the reduction in property valuation fees. Further savings have been achieved over the three-year period within the ICT budget line relating to modules purchased in the previous year dropping out. In 2027/28 the temporary staffing (£0.165m) to reduce the backlog of pensions administration processes and the budget to test AVC suitability (£0.026m) drop out of the budget.

Capital Strategy & Budget

Capital Investment Programme

The Capital Investment Programme sets out our investment plans over the next 5 years to support regeneration and help achieve our Ambitions as set out in the refreshed vision and newly adopted Council Strategy which is very much centred around people. We want South Tyneside to be a place where people live healthy, happy, and fulfilled lives. This will be underpinned by our ambitions, which use our resources as efficiently and effectively as possible to ensure services are provided in areas where they are needed.

As national and global uncertainty continues, we know that delivering our plans will be challenging. However, as we have done over the last decade, we will stay true to our ambitions and continue forward in partnership with the passion, determination, and resilience that have become the solid hallmark of the residents and institutions of South Tyneside.

The capital 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, prudent, sustainable 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.

Building on strong foundations

Over the last decade, despite the huge challenges posed by national austerity we delivered significant investment, transformational physical regeneration and a range of service improvements some of which are detailed below:

  • £100m invested in town centres.
  • £37m invested in local roads and footpaths.
  • £200m invested in new or improved school buildings.
  • Improved connectivity, including £8.1m Arches Improvements, £21m South Shields Transport Interchange, £7.5m Lindisfarne/John Reid Road improvements and £120m Testo’s Roundabout works.
  • ‘Nationally significant’ International Advanced Manufacturing Park established, which will attract £400m private investment and create thousands of jobs (including plans to be home to the UK’s first large scale Gigafactory).
  • Completion of realignment to part of A183 Coast Road to move inland due to ongoing erosion to ensure protection to coastline.
  • £32m invested with continual investment in leisure facilities throughout South Tyneside at Haven Point, Monkton Stadium, Jarrow Focus and Hebburn Central for residents to live healthy and well by improving the experience for leisure users and provide the best service possible giving an increase in memberships from 414 to 11,000 in the last 10 years.
  • Two of our flagship renewable energy schemes, at Hebburn and the award winning Viking Energy Network at Jarrow now complete cutting carbon emissions by 1,035 tonnes in the first year expected to continue to cut annual carbon emissions making a major contribution to our goal of carbon neutrality by 2030.
  • Ongoing investment in our award-winning beaches and parks, including £3m North Marine Park improvements and £5m Littlehaven Promenade and Seawall.

Capital Programme supporting Council Vision

We have five ‘Ambitions’ – the things we want to achieve over the next 20 years to help deliver our Vision. These five Ambitions will guide everything we do. The capital programme will help support revenue investment to achieve each ambition through some of the major projects detailed below. The complete spending plan can be found with the Capital and Investment Strategy in Appendix 4.

We want all people in South Tyneside to be:

Financially Secure

Residents will be financially secure. They will have what they need for a good standard of living.

Healthy and Well

Residents will enjoy good mental and physical health throughout their lives. They will have the best start in life and be able to age well.

Coastal Cycling and Walking routes

Construction has continued on the upgrade to coastal cycling and walking routes to help improve safety for pedestrians and cyclists by widening of the footpath and cycleway along with signalised pedestrian on demand road crossings to enable easier crossing of the roads, supporting the ambition of getting more people involved in sustainable travel and improving health and wellbeing.

Hebburn Extra Care Scheme

Construction is underway to create a new Extra Care scheme on the former Lincoln Court site in Hebburn. The 95 apartment housing project is designed to support those with additional care and support needs to live independently in the community including seventeen specialist dementia apartments.

Other programmes include:

  • Works to improve road safety for school children outside of schools.
  • Improvements to existing playing pitches and changing facilities to assist in promoting sport within the Borough.
  • Plans have been approved for the construction of a 3-storey extension at Mortimer Community College with part internal reconfiguration, to increase capacity and maximise efficiencies. The aim is to increase Pupil Admission Numbers from 1,050 to 1,200 by 2028.

Connected to jobs

Residents will have access to jobs, skills, and learning. They will have the skills and confidence to apply for a wide range of quality local jobs. These jobs will be in key and growing areas of employment and benefit all our Borough.

Work is continuing to relocate South Tyneside College into South Shields Town Centre and we will work with the College to equip local people with the skills and qualifications needed for future opportunities in the low carbon, digital and advanced manufacturing sectors as well as much needed capacity within our health and care workforce including the development of our care academy.

Plans for the new look town centre continue with demolition work completed to facilitate the relocation of South Tyneside College.

Other programmes include:

  • External funding from the Department for Transport utilised for carriageway resurfacing and various road safety initiatives to support the highways asset management plan.
  • In partnership with Sunderland City Council we are continuing to develop a joint strategic employment site, the International Advanced Manufacturing Park (IAMP), north of Nissan and west of the A19. The development is well underway with the new gigafactory battery plant making good progress with the potential to create 4,500 new high-value green jobs in the region by 2030.
  • Jarrow Forward was established under the Long-Term Plan for Towns to oversee a vision for the NE32 postcode area to create transformative opportunities for Jarrow residents. The vision draws on the town’s unique heritage - using its historic reputation for innovation, science, learning, industry and resilience to inspire and attract more people and investment to the town.

Part of strong communities

Residents will live in clean, green, and connected communities where they feel safe.

The Council continues its transformation of Holborn Riverside into a vibrant mix of new dwellings and office space with completion of extensive remediation and civil engineering works on the site.

Construction of new housing at Holborn is continuing with all 48 homes in phase one completed and occupied and 95 homes in phase two now almost complete and occupied.

Ground preparation for the final phase is at an advanced stage and as well as delivering a further 156 homes, this will also include a new riverside promenade, the restoration of three former dry docks for public enjoyment and ecological improvements for butterflies and marine life.

Other programmes that contribute towards this agenda and ambition include:

  • Subject to securing external funding, potential investment in renewable energy schemes at Holborn Renewable energy centre to utilise a combination of renewable technologies to create an innovative energy network to provide heating and electricity to a number of new and existing buildings in the area. This scheme would have the potential to cut carbon emissions by 22% whilst saving the Council on energy costs.
  • As part of our commitment to making South Tyneside a greener and cleaner place to live the Council along with the Office for Low Emissions and Connected Kerb have embarked on projects to upgrade and expand our electric vehicle charging infrastructure with a view to installing up to 2,000 units over a 20 year period.
  • Using externally sourced funds to deliver the Stronger Shores 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. This will test marine habitats for their coastal protection properties along the north-east coastline. The new approaches will involve restoring sub-tidal habitats, such as kelp beds, oyster reefs and sea grass along the north-east coastline.
  • The housing capital programme will ensure that homes we maintain are safe for our tenants, continue to meet decent homes standards and that they are compliant with all regulations whilst ensuring sustainability across the Borough. It will also support the building of new modern and energy efficient housing.

We want these things for every resident, so we are committed to:

Targeting support to make things fairer

We will target support at the residents and parts of our Borough that need it the most, reducing inequalities and making things fairer.

Works are on track to increase the number of residential places for South Tyneside's looked-after children. Work is continuing on the Children’s homes sites in Jarrow, South Shields and Hebburn. These developments will double the number of beds in children’s homes we are able to provide for looked-after children locally. The new homes will mean more children in care can stay in the Borough, close to their family, school and friends.

Other programmes include:

  • Continued investment in our five Community Area Forums (CAFs), each covering a particular area of the Borough. The role of CAFs is to discuss matters important to local people to provide a proactive service within local areas such as cleaner streets, reduced fly tipping, anti-social behaviour and tenancy related issues.
  • Community improvements - This project will manage the current condition or manage improvements to sites to increase the site sustainability, safety and provide future development opportunities.

2025-30 Capital Programme

The provisional five-year Capital Programme for 2025-30 linked to the Council’s vision and ambitions is shown below. A breakdown of the individual projects within each year is detailed within the Capital and Investment Strategy at Appendix 4.

2024-29 Capital spend linked to Ambition
Ambition 2025/26 Gross (£m) 2026/27 Gross (£m) 2027/28 Gross (£m) 2028/29 Gross (£m) 2029/30 Gross (£m)
Healthy and well 0.983 0.543 0.543 0.543 0.883
Part of strong communities 45.371 55.332 39.864 33.244 32.897
Connected to jobs 53.328 8.986 9.386 11.186 6.186
Targeting support 2.592 2.592 2.592 2.592 2.592
Other 3.750 2.750 2.750 2.750 2.750

The estimated funding of the five-year capital programme is shown below. A breakdown of each year is detailed in the Capital and Investment Strategy at Appendix 4.

Funding of the 2025-30 Capital Programme
Captial Programme By Funding 2025/26 2026/27 2027/28 2028/29 2029/30 Total
£m £m £m £m £m £m
External Funding 60.314 30.502 10.728 12.074 7.749
Capital Receipts 4.000 4.000 4.000 4.000 4.000
Revenue Contribution to Capital 1.000 1.000 1.000 1.000 1.000
Borrowing 10.778 4.778 9.498 3.333 2.660
Housing Capital Programme 29.932 29.923 29.909 29.908 29.898

Treasury Management

The Treasury Management and Annual Investment Strategy is a requirement of the Local Government Finance Act 1992, the Local Government Act 2003, the Local Authorities (Capital Finance and Accounting) (England) Regulations 2003, the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on Treasury Management, the CIPFA Prudential Code for Capital Finance in Local Authorities and guidance on Investment Practice from the Department for Levelling Up, Housing and Communities.

It is a statutory requirement of the Local Government Finance Act 1992 that the Council produces a balanced budget. Section 31(a) of the Act requires a local authority to calculate its budget requirement for each financial year to include the revenue costs that flow from capital financing decisions. This means that increases in capital expenditure must be limited to a level whereby increases in charges to revenue from:

  • increases in all debt charges to include Minimum Revenue Provision caused by increased borrowing to finance additional capital expenditure, and
  • any increases in running costs from new capital projects are limited to a level, which is affordable within the projected income of the Council for the foreseeable future.

The Local Government Act 2003 requires the Council to set out its Treasury Strategy for borrowing and to prepare an Annual Investment Strategy.

The Council has adopted the CIPFA Code of Practice on Treasury Management in the Public Service. Within this document Treasury management is defined as:

The management of the local authority’s borrowing, investments and cash flows, including its banking, money market and capital market transactions; the effective control of the risks associated with those activities: and the pursuit of optimum performance consistent with those risks.

The Treasury Management Strategy included at Appendix 6 to this report complies with the CIPFA Code, which requires the Treasury Management Strategy to be approved by Borough Council prior to the start of the financial year.

The Local Government Act 2003 also requires the Council to “have regard to” a further CIPFA Code called “The Prudential Code for Capital Finance in Local Authorities”.

The key objectives of the Treasury Management Code and the Prudential Code are to ensure, within a clear framework, that the capital investment plans of local authorities are affordable, prudent and sustainable and that Treasury Management decisions are taken in accordance with good professional practice.

To demonstrate that local authorities have fulfilled these objectives, the Treasury Management Code and the Prudential Code set out indicators that must be used and factors to be taken into account. The indicators and factors that apply to Treasury Management are contained in the Strategy attached at Appendix 6 to this report.

The Treasury Management Strategy and the Annual Investment Strategy have both been discussed andagreed with the Council’s Treasury Management Adviser, Link.

The Council’s Treasury Management covers two areas:

  • Part 1 – South Tyneside Consolidated Loans Fund – this covers the Council’s borrowings and contains the Treasury and Prudential Indicators required by the Treasury Management Code and the Prudential Code.
  • Part 2 – Annual Investment Strategy – this concerns the investment of the cash balances of the Council. Priority is given to the security of the capital sum and the liquidity of investments.

Training

The CIPFA Treasury Management Code requires the responsible officer to ensure that members with responsibility for treasury management receive adequate training in treasury management. This especially applies to members responsible for scrutiny. On an annual basis the Council provides in person training available to all elected members on the treasury management framework and the Council’s treasury management activities.

Furthermore, pages 47 and 48 of the Code state that they expect “all organisations to have a formal and comprehensive knowledge and skills or training policy for the effective acquisition and retention of treasury management knowledge and skills for those responsible for management, delivery, governance and decision making.

The scale and nature of this will depend on the size and complexity of the organisation’s treasury management needs. Organisations should consider how to assess whether treasury management staff and board/ council members have the required knowledge and skills to undertake their roles and whether they have been able to maintain those skills and keep them up to date.

As a minimum, authorities should carry out the following to monitor and review knowledge and skills:

  • Record attendance at training and ensure action is taken where poor attendance is identified.
  • Prepare tailored learning plans for treasury management officers and board/council members.
  • Require treasury management officers and board/council members to undertake self-assessment against the required competencies (as set out in the schedule thatmay be adopted by the organisation).
  • Have regular communication with officers and board/council members, encouraging them to highlight training needs on an ongoing basis.

Appendix 1: Council Revenue Budget 2025/26

Council Revenue Budget
Council Revenue Budget Total Expenditure Total Income 2025/26 Budget Staffing 2025/26
£ £ £ No of Posts FTE's
Business and Resources
Corporate Finance / Benefits and Customer Services 101,416,974 (138,608,200) (37,191,226) 206 180.9
Digital & ICT Services 8.314,410 (2,863,160) 5,451,250 115 105.0
Corporate Assurance 1,883,170 (1,339,660) 543,510 7 6.6
People & Organisational Change 4,660,644 (2,130,894) 2,529,750 93 86.6
Culture and Leisure 10,481,260 (7,579,640) 2,901,620 273 184.1
Pensions Office 230,088,000 (230,088,000) 0 94 86.0
Total Business And Resources 356,844,458 (382,609,554) (25,765,096) 788 649.2
Governance and Corporate Affairs
Legal and Governance 2,993,518 (1,490,628) 1,502,890 45 38.0
Policy and Insight 749,140 (43,550) 705,590 8 7.0
Performance and Change Management 1,591,866 (931,186) 660,680 29 28.0
Communications, Engagement and Support Services 5,683,670 (1,105,910) 4,577,760 115 106.0
Total Governance and Corporate Affairs 11,018,194 (3,571,274) 7,446,920 197 179.0
Place Strategy
Public Protection 5,653,452 (3,846,422) 1,807,030 110 93.0
Strategic Investment and Growth 10,093,120 (8,303,600) 1,789,520 68 65.0
Strategic Housing and Assets 22,658,995 (9,099,475) 13,559,520 310 179.0
Strategic Transport and Environment 11,983,440 (1,757,040) 10,226,400 36 31.0
Total Place Strategy 50,389,007 (23,006,537) 27,382,470 524 368.0
Community Operations
Highways, Infrastructure and Project Delivery 13,948,610 (12,888,300) 1,060,310 178 123.0
Operations 67,355,924 (63,839,618) 3,516,306 760 731.0
Total Community Operations 81,304,534 (76,727,918) 4,576,616 938 854.0
Children’s Social Care, Learning and Early Help
Children and Families Social Care 41,393,967 (3,157,300) 38,236,667 336 305.0
Education, SEND and Inclusion 54,469,933 (34,229,940) 20,239,993 724 497.0
Total Children's Social Care, Learning and Early Help 95,863,900 (37,387,240) 58,476,660 1,060 802.0
Adult Social Care and Commissioning
Adult Social Care 128,196,484 (54,758,380) 73,438,104 378 325.0
Commissioning and Quality Assurance 2,672,866 (1,479,800) 1,193,066 41 37.0
Total Adult Social Care and Commissioning 130,869,350 (56,238,180) 74,631,170 419 362.0
Public Health
Public Health 15,749,360 (731,100) 15,018,260 35 30.0
Total Public Health 15,749,360 (731,100) 15,018,260 35 30.0
Delegated Schools Budget 129,617,406 (129,617,406) 0
Total Schools Delegated 129,617,406 (129,617,406) 0
Total Council Revenue Budget 871,656,209 (709,889,209) 161,767,000 3,961 3,244.2

Appendix 2 Reserves Policy

The requirement for financial reserves is recognised in statute by sections 32 and 43 of the Local Government Finance Act 1992. Councils must have regard to the level of reserves needed for meeting estimated future expenditure when calculating the budget requirement.

Reserves can be held for a variety of purposes such as to cushion the impact of unexpected events and emergencies or as a means of building up funds to meet known or predicted liabilities.

The principles used by the Chief Financial Officer (CFO) to assess and advise on the adequacy of reserves when setting the budget ensure that account is taken of the strategic, operational and financial risks facing the Council. This includes for example the Council’s record in budget and financial management, its capacity to manage in-year budget pressures and the current and projected external financial environment. Under the Local Government Act 2003, the CFO must report to Council on the adequacy of reserves. As an ultimate backstop, the CFO is required to report to all councillors under section 114 of the Local Government Finance Act 1988 in the event that reserves are seriously depleted and has the impact of suspending spending except to meet statutory obligations.

In accordance with good financial practice, the Council holds a number of reserves as below:

Unearmarked General Fund Reserve
This reserve is held to manage the impact of any unplanned overspends within the Council’s General Fund budget. The policy objective is to hold a minimum balance in this reserve of £10m.
Future Funding Reserve
This reserve is held to support medium-term requirements to balance the budget taking account of changes to grant funding, inflationary and demand pressures, financial shocks as well as investment needs.
Various Earmarked Reserves
These are held to meet expected and potential liabilities or specific investment requirements. Examples include emergency events such as unforeseen financial costs or dealing with a natural disaster, claims against our self-insurance fund, future payments due under PFI contracts, monies to support economic development, volatility within the Collection Fund which deals with the income and expenditure relating to council tax and business rates etc. It also includes reserves ringfenced by statute such as the Housing Revenue Account and reserves held on behalf of schools.

Appendix 3 Housing Revenue Account Service Charges

Landlord Charges - Services and Facilities
2024/25 Charge £/wk Change % 2025/26 Charge £/wk
Garage rents £7.80 1.7% £7.90
Tenant Heating Charges Hebburn Newtown 1-bed £4.80 10.0% £5.30
Hebburn Newton 2-bed £13.00 10.0% £14.30
Jarrow Energy tariff p/kwh £0.13 10.0% £0.14
Housing Plus - Landlord Charges for Scheme Managers and Communal Facilities
2024/25 Charge £/wk Change % 2025/26 Charge £/wk
Service Charges Purpose built flats with scheme manager and communal facilities £16.20 1.7% £16.50
Group dwellings with scheme manager and nearby communal facilities £7.10 1.7% £7.20
Guest Room Charges Charges for overnight stay or emergency situations per night £14.80 1.7% £15.10
Furnished Tenancy Scheme Charges
2024/25 Charge £/wk Change % 2025/26 Charge £/wk
Furniture options New Tenancies supplied with a package of furniture and Electrical Goods - Option 1 Points up to 110 £27.26 1.7% £27.73
New Tenancies supplied with a package of furniture and Electrical Goods - Option 2 Points up to 160 £36.33 1.7% £36.95
New Tenancies supplied with a package of furniture and Electrical Goods - Option 3 Points up to 200 £45.37 1.7% £46.14
New Tenancies supplied with a package of furniture and Electrical Goods - Mini Option Points up to 60 £17.39 1.7% £17.68
Decent Homes decant properties supplied cookers £7.09 1.7% £7.21
Caretaker and Concierge Charges
Caretaker Charges 2024/25 Charge £/wk Change % 2025/26 Charge £/wk
Durham Court £3.50 1.7% £3.60
Ellen Court £8.90 1.7% £9.10
Monastery Court £8.90 1.7% £9.10
Wilkinson Court £8.90 1.7% £9.10
Concierge Charges
Durham Court £12.60 1.7% £12.80
Ellen Court £12.60 1.7% £12.80
Monastery Court £12.60 1.7% £12.80
Wilkinson Court £12.60 1.7% £12.80
Support Service Charges - Supporting People
Support Service Charges - Supporting People 2024/25 Charge £/wk Change % 2025/26 Charge £/wk
Community Alarms - Support
Council Tenants Standard - Hardwired or Solo Unit £3.70 1.7% £3.80
Council Tenants Enhanced - Hardwired or Solo Unit £5.80 1.7% £5.90
Scheme Managers - Support
Council Tenants Scheme Managers - Support Services £14.00 1.7% £14.20
Other Specific Service Charges
Other Specific Service Charges 2024/25 Charge £/wk Change % 2025/26 Charge £/wk
Council - HRA Temporary Accommodation
1-bed accommodation £31.90 1.7% £32.40
2-bed accommodation £44.90 1.7% £45.70
3-bed accommodation £65.40 1.7% £66.50
Tenants - Housing Plus Heating Charges
Tenants - Housing Plus Heating Charges 2024/25 2025/26
Cost per property per wk. - Bed Sit Cost per property per wk. - 1 Bed Cost per property per wk. - 2 Bed Cost per property per wk. - Bed Sit Cost per property per wk. - 1 Bed Cost per property per wk. - 2 Bed
Davies Hall £0.00 £13.10 £15.76 £0.00 £14.41 £17.34
McIntrye Hall £0.00 £14.59 £0.00 £0.00 £16.04 £0.00
Birch Grove £0.00 £15.59 £0.00 £0.00 £17.15 £0.00
Calf Close £0.00 £12.42 £14.92 £0.00 £13.66 £16.41
Porlock House £0.00 £11.89 £14.32 £0.00 £13.08 £15.76
Bishop Ramsey £0.00 £12.93 £15.52 £0.00 £14.22 £17.07
Farding Lake £0.00 £12.26 £0.00 £0.00 £13.49 £0.00
Prince Ed Court £0.00 £11.00 £13.17 £0.00 £12.10 £14.49
Blenkinsop House £7.57 £8.41 £0.00 £8.33 £9.25 £0.00
Borrowdale House £0.00 £8.58 £0.00 £0.00 £9.44 £0.00
Huntcliffe House £0.00 £9.32 £0.00 £0.00 £10.25 £0.00
Inskip House £0.00 £11.50 £0.00 £0.00 £12.65 £0.00
Wingrove House £0.00 £11.42 £13.77 £0.00 £12.56 £15.15
Clayside House £0.00 £9.84 £0.00 £0.00 £10.83 £0.00
Glenthorpe House £0.00 £12.81 £15.43 £0.00 £14.09 £16.98
Hallgarth House £0.00 £12.34 £14.84 £0.00 £13.57 £16.33
Julius Court £0.00 £10.08 £0.00 £0.00 £11.09 £0.00
Thomas Bell SA £0.00 £13.21 £0.00 £0.00 £14.54 £0.00
Patrick Cain House £0.00 £10.24 £12.34 £0.00 £11.26 £13.57
Leaseholders Management Fee
Leaseholders Management Fee 2024/25 Charge £/wk Change % 2025/26 Charge £/wk
Freeze charge on Leaseholders Management Fee £134.60 0.0% £134.60
Tenant Communal Cleaning Charges
  2024/25 Charge £/wk Change % 2025/26 Charge £/wk
High Rise Properties
Durham Court £2.00 1.7% £2.00
Mid Rise Properties
Dean Road £3.40 1.7% £3.50
Laygate & Trinity £3.30 1.7% £3.40
Whiteleas £3.40 1.7% £3.50
Green Lane £6.80 1.7% £6.90
Tyne Dock £4.70 1.7% £4.80
Galsworthy Road £3.40 1.7% £3.50
River Drive £1.10 1.7% £1.10
Mowbray Road £1.50 1.7% £1.50
Stewart and Fulwell £1.00 1.7% £1.00
Sheltered Housing
Birch Grove SA £8.70 1.7% £8.80
Bishop Ramsay SA £9.70 1.7% £9.90
Blenkinsop House SA £4.70 1.7% £4.80
Borrowdale House SA £8.20 1.7% £8.30
Calf Close House SA £6.80 1.7% £6.90
Cheviot House SA £7.60 1.7% £7.70
Clayside House SA £6.80 1.7% £6.90
Curren House SA £11.20 1.7% £11.40
Davies Hall SA £10.90 1.7% £11.10
Farding Lake SA £8.00 1.7% £8.10
Fernyhough Hall SA £6.30 1.7% £6.40
Glenthorpe House SA £6.80 1.7% £6.90
Hallgarth House SA £6.40 1.7% £6.50
Henley House SA £8.30 1.7% £8.40
Huntcliffe House SA £9.40 1.7% £9.60
Inskip House SA £8.20 1.7% £8.30
Julius Court SA £6.40 1.7% £6.50
Lincoln Court SA £9.70 1.7% £9.90
McIntyre Hall SA £8.50 1.7% £8.60
Patrick Cain House SA £9.90 1.7% £10.10
Porlock House SA £7.00 1.7% £7.10
Prince Edward Court SA £10.80 1.7% £11.00
Thomas Bell SA £7.70 1.7% £7.80
Wingrove House SA £6.40 1.7% £6.50

Appendix 4 Capital and Investment Strategy

Please see Capital and Investment Stategy 2025-2030

Appendix 5 Minimum Revenue Provision Policy Statement

  1. 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.
  2. MRP is charged in the year following that in which an asset is brought into use.
  3. 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.
  4. 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.
  5. The Council has in place a loan finance facility with Karbon Homes Ltd. 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.
  6. 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.
  7. 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.
  8. 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.

Appendix 6 Equality Impact Assessment of Budget Proposals

Please see Equality Impact Assessment of Budget Proposals

Appendix 7 Treasury Management Strategy 2025/26

Please see Treasury Management Strategy 2025/26

Appendix 8 Pay Policy Statement

Please see Pay Policy Statement

Appendix 9 Rent Setting Policy

Please see Rent Setting Policy