Durham County Council sets out final budget

Durham County Council sets out final budget

Durham County Council sets out its final budget proposals for the next four years.

The authority can balance its budget in 2026/27, with a 3.1 per cent council tax increase and no use of reserves next year, but faces a £42 million challenge to balance its budgets over the period 2027/28 to 2029/30.

The budget outlines savings proposals of £15.7 million across the next four years, with £12.9 million to be delivered next year.

The savings proposed to be delivered next year, alongside a slightly improved funding position, would mean that a five per cent rise in council tax would be avoided.

The proposed increase in council tax would represent a below inflation increase, for the first time in several years.

A North East council has set out its final budget ahead of it being formally considered this month.

Durham County Council’s Cabinet is being recommended to agree proposals for the authority’s budget for 2026/27, as well as its updated Medium Term Financial Plan (MTFP) financial forecasts up to 2029/30.

The proposals outlined within the budget and MTFP report, which Cabinet will be presented with next week, have gone through an extensive two-stage consultation process with residents and stakeholders.

The proposals seek to balance investment in front line services, in support of the authority’s declared Care Emergency, with the need for financial prudence during a challenging period for local councils. They also seek to protect residents from excessive increases in council tax.

Despite some additional funding from government, and the savings proposals that have been factored into the budget proposals, the council faces a budget deficit of £9.546 million in the next year and an additional deficit of £42.448 million for the following three years (2027/28 to 2029/30).

This is due to unavoidable operational financial pressures which the council faces across the next four years, including in adult and children’s social care; and home to school transport. The authority also faces pressures from pay and price inflation costs, such as the increase in employer National Insurance Contributions; new waste management responsibilities; and the costs of maintaining the council’s buildings and assets.

These pressures have necessitated a recommendation to increase council tax by 3.1 per cent, which would close the gap and balance the council’s budget next year.

The government’s funding formula assumes that local authorities increase their council tax by the maximum of five per cent each year. The council’s proposed increase is within the government’s expectations but is below the maximum increase of five per cent.

It is also below the current and projected rates of inflation, which are at 3.4 and 3.5 per cent respectively, and below the increase in the National Living Wage next year.

The council’s budget also outlines £15.719 million of savings which have been extensively consulted on through two rounds of development. Of these savings proposals, £12.914 million would be delivered next year, in 2026/27.

The savings proposals which have been identified have helped to limit the required increase in council tax, which is expected to be below the levels applied by most other councils in the region and across the country.

Without these savings the council would not have been able to balance its budget, even with a maximum five per cent council tax increase being applied.

Cabinet will also be asked to approve a number of capital investments which include investment in schools and special educational needs provision. They also include investment in Extra Care capacity for adults and expanding provision to reduce pressure on looked after children placements. These are in line with the authority’s Care Emergency, as the council looks to invest in services to save in the long-term. This will be supplemented with investment in highways and footpath maintenance; street lighting; drainage works; and investment in the county’s transport network.

Some of these proposed investments will be dependent on capital grant allocations and will be adjusted based on final confirmation of funding.

Cllr Darren Grimes, Deputy leader of Durham County Council and Cabinet member for finance, said: “This budget has been built on a commitment to making the council an

effective, efficient servant of the people while ensuring taxpayers’ money is spent wisely and well.

“Over the last 15 years, this council has had to identify and deliver savings totalling £288 million. This has been necessary to meet the challenges of reduced funding and an inability to raise sufficient income locally through council tax and business rates, while facing unavoidable inflationary and increased demand for services.

“In this budget we have identified savings which have enabled us to avoid increasing council tax by the maximum next year. While we are facing an incredibly difficult financial position, we have done all that we can to avoid putting this burden onto the taxpayer, with any increases in council tax kept below inflation, and below what has been applied in County Durham before.

“A key objective of this Cabinet is to ensure we deliver value for money and efficiency savings to protect front line services as much as possible, which I am confident this budget proposal delivers.

“We will always prioritise protecting the council tax payer through driving efficiency and not shying away from difficult decisions. This budget gives us a strong platform on which to build, providing investment in areas that matter to local communities, and which deliver on local priorities.”

If approved by Cabinet when it meets on Wednesday 11 February, the council’s budget will then go to full council for formal approval on Wednesday 18 February.