All councils must set a balanced budget every year by law. A balanced budget means that we can limit our spending to the money we receive in income.
We have now published our list of budget proposals for 2025/2026.
The deadline for taking part in the budget consultation was midnight on Wednesday 8 January 2025.
Final decisions will be taken during a vote of all councillors in February 2025. The proposals could be subject to change as more information on funding that may be available from government is released after 19 December.
Consultation events
We held consultation events in Thorntree, Marton, and Acklam in December. Thank you to everyone who attended.
Background
We have worked hard over the past 18 months to recover our financial position and start to change the way services are delivered.
This has been necessary due to our reserves (the money set aside for specific reasons and emergencies) falling to critically low levels.
In the past, reserves have been used to fill budget gaps after we spent more on services than we received in income.
This situation meant that as of April 2024, Middlesbrough had the fifth lowest level of reserves relative to the size of its budget of all English single tier councils.
Our level of reserves means we would find it hard to meet unexpected costs and to pay for improvements to services in the future. We have a plan to rebuild our reserves over the next few years.
All of this means we have to make savings and secure ongoing income from Council Tax. The proposals now subject to consultation present a balanced position for the next two years.
The budget would also see the first reinvestment in activities including street cleaning and grass cutting for over ten years.
This can be viewed as a positive given the financial position we were in at this stage last year.
In 2024/2025 we were unable to balance our budget even after agreeing savings plans of around £14m, rising to £21m by 2026/2027.
We had to rely on special government permission to borrow £4.7m to cover the costs of day-to-day spending in 2024/2025. This is known as Exceptional Financial Support.
The challenge now is for us to transform the way we deliver services, supporting people to become more independent. This will include modernising our approach to social care and waste disposal.
If the budget and Council Tax proposals are approved, we will not need government support in the way we did last year.
Savings and income growth proposals
Savings and income generation proposals to fill a gap of approximately £7m are required next year, rising to £8.7m in 2026/2027.
Many of the savings proposals build on the work done to transform the way social care is delivered, continuing the council's focus on its highest spending areas.
Providing adult and children’s social care is due to account for 79% of the Council's net revenue budget in the current financial year. This represents a reduction of 4% from 83% in 2023/2024, showing an early indication of the progress being made.
Four specific proposals judged to potentially affect front-line service delivery levels will be subject to public consultation.
At present the council pays for some home to school transport that legally could be charged to special schools and health services. A change would see the council stop paying these costs. The costs would be covered by a school or health service provider instead.
Fees and charges for bereavement services, highways management and fleet services such as taxi tests would increase. The cost of car parking could also increase by an average of 3.5%, roughly 10p per stay.
You can see details of the savings proposals judged to have minimal, or no impact on frontline services here.
You can see details of the savings proposals judged to have an effect on frontline services here.
You can see the proposed changes to fees and charges here.
The budget and medium-term financial plan report explains our financial situation in more detail.
Investment proposals
The budget includes proposals to invest in priority areas that local people would benefit from.
Area care would receive investment for the first time in ten years, meaning more staff and time for grass cutting, street cleaning, and pest control.
There would also be extra money for youth services, and more staff to help bring events to Middlesbrough that can support jobs and local businesses.
The areas targeted for investment link to our priorities for the town which are set out in the Council Plan.
You can see details of the proposed investments into service areas here.
Council Tax
A 4.99% increase in Council Tax is proposed, including 2% of the increase to pay for adult social care, in line with the maximum level set by government.
The government assumes councils will apply the maximum increase when measuring the 'spending power' a council has available when funding is allocated.
If councils decide not to increase council tax by the maximum level, this reduction in income is not recognised by government. The maximum increase is applied by the vast majority of councils.
Every 1% increase raises around £700,000 to meet the costs of delivering services. Any decision not to raise Council Tax by the maximum amount allowed by government results in a permanent loss of income for the Council. It could mean more savings need to be made or put planned investment in services at risk.
Due to our fragile financial position and uncertainty over future funding levels from government, the Director of Finance has advised that the Council Tax be set at level of 4.99% for 2025/2026.
Almost 85% of the homes in Middlesbrough are in Council Tax bands A, B or C.
Before any discounts or Council Tax Reduction is applied, the proposed increase would add £1.26 per week to a band A bill, £1.47 to a band B bill, and £1.69 to a band C bill.
We offer support to households with low income and as a result they will pay less. Find out more about Council Tax Reduction.