Middlesbrough Council plans £14m savings, including 75 job cuts, in attempt to avoid bankruptcy
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Middlesbrough Council is planning to make some of its staff redundant as part of £14m worth of savings, as it seeks to avoid having to issue a Section 114 notice, which would force the council into bankruptcy.
The Council’s Executive will be asked next week to approve a public consultation on the measures that could result in a reduction of around 75 full-time equivalent posts at the authority.
Middlesbrough Mayor, Chris Cooke, told ITV News Tyne Tees: “There will be job losses across the council, but there will also be losses of agency staff, which will make up some of those numbers. I think staff, for a long time, have been very worried about the council as a whole, because if we were to hit that Section 114, the amount of job losses would be extreme”.
He added that in order to balance the budget for 2024/25, the council would not only have to address an overspend of £7.4m, calculated at the end of October 2023, but is also “likely” to seek “exceptional financial support” from the government to help make up for a further £6.3m shortfall in order for the council to set a legally balanced budget in February.
To help make the proposed £14m savings, the council will need to put in process a number of plans to transform how it operates.
Mr Cooke said: “We need to take into account the (local government financial) settlement and how far we can progress those plans between now and late January, but ultimately the Director of Finance will make that decision, and the decision is likely that we are going to need that extra money, in order to buy us that amount of time that we need, in order to get the plans to fruition”.
In its latest budget report, the council blamed “persistent high inflation” across all of its services, greater need for social care, plus increased costs for services like homelessness and waste disposal.
It said that government funding to the council has been reduced by 46% since 2013/14, claiming that the government has not provided any uplift to contribute to the tackling of inflation.
The leadership also claimed its reserves became critically low in April 2023 at £14.8m, which it said limited its ability to meet the costs of unforeseen issues, like the Covid pandemic.
It said the council is in danger of running out of reserves due to its annual spending exceeding its income source by around 10%.
Proposed Spending CutsOutlining proposals to balance the budget, totalling £14m, in 2024/25, the council plans include:
75 potential redundancies
4.99% council tax increase
A change to fortnightly refuse collection (all households with three or more people will qualify for a larger bin)
£40 annual charge for the collection of garden waste
Potential closure of Captain Cook Birthplace Museum
New charges for certain car parking permits
The proposed increase in council tax would mean those in Band A properties, which accounts for more than half of households in the town, would pay an extra £1.20 per week.
Asked what he would say to families struggling to pay their bills during a cost of living crisis, the mayor told ITV News: “If anyone is struggling, please come and talk to us. We have a council tax reduction scheme, we have multiple other services in place that can support them."
He added that the government has not provided help for the council so far and said they do need to provide the right level of funding needed for the authority to be “a more self-sustaining council”.
He said: “Equally, we cannot just sit and wait for that. We actually have to make changes to manoeuvre ourselves to be a more effective council, so we’ll do that, but we’ll always make the case that Middlesbrough needs more funding, so that we don’t have to put the burden onto residents”.
Mr Cooke said these decisions were not taken lightly, and warned: “If the council was to go under, and that’s a very real threat, then actually a lot of services would just be cut. There would be no extra services like area care. The base line services that we have to provide as a council are actually very low."
Social Care SavingsOne major financial difficulty outlined for the council is reducing the amount it spends on caring for vulnerable adults and children. The report said adult and child social care currently accounts for 83% of its annual budget. That is far higher than the national average council spend on social care of 66%.
More adults were admitted into residential and nursing care homes in Middlesbrough at 42.4 per 100,000 of population, compared to the national average of 13.9 per 100,000 in 2021/22.
In 2022/23, there were 140 per 10,000 child protection plans in place in the town, compared to the national average of 43.2 per 10,000 children.
The council said for adult social care, it plans to introduce “enhanced early intervention”, more use of digital technology, increased re-ablement and an extended accommodation offer. For children’s social care, it plans to introduce enhanced early help and prevention, development of new placement models and more in-house foster care.
Mr Cooke told ITV News: ”At the moment those costs are way, way too high. What we need to do is reduce those costs, get the children into safe accommodation, but also make sure that we then have money, in order to free up and spend on other services.
“We need to make sure that we work on employing people directly by the council, rather than using agency workers, and making sure we keep those costs down, because the costs of agency staff and out of area placements (for children) are so high, that they’ve almost crippled the council."
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