Medium Term Financial Plan 2025 - 2030

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

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:

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.

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:

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).

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.

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

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:

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:

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.

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).

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.

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.

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

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.

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.

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.

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 28^thJanuary 2025.

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.

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 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:

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

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.

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.

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:

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.

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.

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.

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.

Please see Capital and Investment Stategy 2025-2030

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.

Please see Equality Impact Assessment of Budget Proposals

Please see Treasury Management Strategy 2025/26

Please see Pay Policy Statement

Please see Rent Setting Policy