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Budget 2024-2025

All councils are legally required to set a balanced budget every year. A balanced budget means we have enough money to pay for everything we need to pay for.

Like a number of other councils across the country, we're struggling to set a balanced budget for 2024-2025.

Costs are going up because of inflation, and we also have more people who need social care than in previous years. Our reserves (the money we have saved for emergencies) are also critically low, which means we'd struggle to pay any unexpected costs in the future.

All of this means that we need to make around £20m of savings to help us try and set a balanced budget.

We're running a public consultation on a list of potential savings, totalling £14m. These include:

  • changing to fortnightly bin collections
  • introducing a charge for green waste collections
  • the potential closure, or a change of operator, of the Captain Cook Birthplace Museum

As part of the potential changes to bin collections, households of three or more people would get a larger bin to help with the move to fortnightly collections. We'd also increase the amount of education and support we offer to help people recycle more. People who have communal bins would still get a weekly bin collection.

The proposed charge for green waste collections would be £40 per year. The collections would be every two weeks, starting in early April and continuing until late November.

83% of our budget in 2023-2024 is being spent on providing social care for adults and children. Many of our proposed savings will come from improving the way we provide social care, making it more efficient and saving money.

Savings proposals

The budget and medium-term financial plan report explains our financial situation in more detail. You can also find out more in the frequently asked questions below.

The proposed savings are listed in two documents:

Consultation

The public consultation on our proposed savings closed on 18 January 2024. We'll update this page with our next steps soon.

Frequently asked questions

Where does the council get its money from?

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Our money comes from Council Tax, Business Rates, funds from fees and charges, and government grants.

Each year the government gives us money to help cover the cost of services. The amount is decided in December, shortly after we have announced our own budget proposals.

The proportion of our budget which is made up from general government funding has reduced over the past 10 years.

During the same period, the money we receive from Council Tax has become more important.

Most people in Middlesbrough live in properties which are in Council Tax bands A to C.

This means we raise less from Council Tax than areas which have more properties in the higher tax bands.

The level of rates businesses pay is set by government. Many small businesses do not pay Business Rates.

We also receive money from some services and venues. This income is used to pay for the services we provide.

What does the council spend its money on?

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Providing social care for vulnerable people in Middlesbrough takes up around 83% of our budget.

That is a much higher proportion than many other local authorities.

We spend the remaining 17% of our budget on a huge range of other services, including:

  • street cleaning and area care
  • waste and recycling collection
  • libraries and community hubs
  • museums and venues
  • cultural events
  • parks and other green spaces
  • street wardens, community safety, and fly tipping removal
  • highways
  • street lighting
  • public health and food safety
  • regeneration
  • benefits and welfare advice

Will the council have to make savings this year?

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Yes. The proposed budget for 2024-2025 includes savings proposals totalling around £14m, rising to around £21m in 2026/27.

A report approved by the council's Executive set out how a shortfall of around £6.3m remains in the budget.

Why is there a shortfall?

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Our overall budget has reduced significantly in the past 10 years.

The cost of providing social care is increasing and we have more demand for social care than many other areas, including our neighbours.

More adults in Middlesbrough are admitted to residential and nursing care homes at 42.4 per 100,000 of population, compared to the national average of 13.9 per 100,000 in 2021-2022.

In terms of child protection plans in place in Middlesbrough, there were 140 per 10,000 children in 2022-2023, while the national average was 43.2 per 10,000 children.

Many of the proposals being considered in the budget are targeted towards saving money in social care departments, while at the same time making sure we can continue to deliver a safe and effective service.

Has increasing inflation affected the budget?

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Yes. Inflation has been high for over a year. It reached 11% last October and as of November 2023 stood at 3.9%.

That has increased the cost of everything the council buys to delivers its services, such as fuel and energy.

In an attempt to reduce inflation, the Bank of England's interest rate has risen significantly to 5.25%. This has increased some of the council's debt repayments in a similar way to how household budgets have been affected.

What are we doing to balance the budget?

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Many of the savings proposed, around £9.9m, will be met by increasing efficiency in the children's and adult social care budgets.

In children's social care, there will be enhanced early help and prevention, the development of new models for placements of looked after children, and more in-house fostering capacity.

In adult social care, there will be more early intervention, increased use of digital technology, more of a focus on reablement, and a broadening of the types of accommodation we offer.

What else is being proposed?

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A public consultation has now started on the budget proposals, allowing you to have your say on measures that would have an impact on frontline services.

They include:

  • moving in line with many local authority neighbours by introducing fortnightly waste collections and focusing on improving recycling rates alongside residents
  • introducing a £40 annual charge for green waste collections, which would be extended into a longer collection season
  • the potential closure of the Captain Cook Birthplace Museum
  • a £2 per day parking charge at Stewart Park
  • a £24 per job charge to collect bulky waste

Are any jobs at risk?

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As part of the savings proposals, around 75 full time equivalent posts could be cut.

How do I take part in the consultation?

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The easiest way to have your say on our proposed savings is by filling in our online consultation.

If you need a paper survey, a version in another language, or a version in an alternative format which meets your needs, email letstalk@middlesbrough.gov.uk. You can also email us if you have a question about the proposals.

The consultation closes on 18 January 2024.

Why has the council spent money on other big projects, when it struggles to finance day to day services?

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Many sources of funding are provided directly by the government or funnelled through other bodies like the Tees Valley Combined Authority - and can only be spent on specific projects.

This includes funding from the Government's Levelling Up, Future High Streets, and Towns Funds.

A recent example of specific grant-funded work is the ongoing transformation of Captain Cook Square.

By law, this type of funding cannot be spent on anything else but the regeneration and infrastructure projects it is awarded for.

If the council did not deliver these projects it would not receive the funding.

Can you use reserves to plug the gap?

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The council has critically low levels of reserves to meet unforeseen spending pressures.

Reserves are like savings - once they're used up, they cannot be used again.

Why is Council Tax going up?

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The government has said that the core spending power of councils has increased.

When calculating councils' core spending power, the government assumes that Council Tax will be increased each year by the maximum legally allowed.

That is currently 2.99%, plus 2% which is specifically set aside to pay for adult social care - a total of 4.99%.

Every 1% increase adds around £675,000 per year to the council's budget.

Any decision not to raise Council Tax leads to more budget pressure and potential cuts to services.

Council Tax has not been raised by the maximum amount in the past two years, meaning our core spending power hasn't increased in the way the government assumes.

How much is Council Tax going up by?

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It's proposed that Council Tax bills will rise by the maximum of 4.99%.

That increase would mean those in band A properties - over half of households in the Middlesbrough - would pay an extra £1.20 per week.

Those in band B properties (17.4%) would pay an extra £1.40 per week. Those in band C properties (17.3%) would pay an extra £1.61 per week.

National comparisons often look at the tax charged for a band D property.

In Middlesbrough, there are not many households in that category (only 8.4%). Those in band D would pay an extra £1.81 per week.

Per property, Council Tax bills in Middlesbrough are lower than the national average.

Is there are any help available if I cannot afford my Council Tax?

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Yes. We've recently launched a new Council Tax reduction scheme, which supports a wide range of people who might need help with their bills.

The full criteria and more information is available on the Our Council Tax Reduction scheme page.

We have also offered a wide range of support during the cost of living crisis, with more information available on the cost of living page.

What will happen if the budget gap is not made up?

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The local government finance settlement, which spells out how much funding we will receive from government, was broadly in line with forecasts and brought no new resources above those already planned for.

A budget shortfall of £6.3m remains and on Wednesday, January 17 the Executive will be asked to agree that the council makes an application to government for exceptional financial support to help us balance this year's budget.

If granted by government, it would give the council the ability to borrow money as a 'bridging loan' to support its short term financial recovery and balance its 2024/25 budget.

Will the council go bankrupt?

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Technically, councils cannot go bankrupt.

If we're unable to set a balanced budget, we could issue what is called a Section 114 notice.

This has been seen recently at councils under different party-political control, including Thurrock, Nottingham, Woking, and Birmingham.

If that happens, it is possible the government would intervene in the running of the council.

That could lead to the council only delivering legally-mandated services like social care and refuse collection, with all services we are not legally required to deliver put at risk.

In that scenario, many council staff roles would be under threat, while the government could impose a much larger Council Tax increase on Middlesbrough residents.

Is there a plan for next year?

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The budget proposals agreed by Executive contain a number of financial plans which see further savings in future years, especially through improved efficiencies in social care.

The Executive has also agreed to a review of the council's assets, to identify land and buildings which the council could sell.

It includes car parks, strips of residential land, shopping and industrial parks and a golf course.

Nothing has yet been sold by the council, and each asset will be considered on an individual basis before any sale is agreed.

The capital raised from asset sales is planned to fund a transformation in the way services are run which would allow the council to continue to deliver what's important to the people of Middlesbrough.