The Mayor indicated that his statement would focus on the past, present and future of Middlesbrough Council's finances.
Since the formation of the Coalition Government the economic themes of Government had been: deficit/public borrowing, austerity measures, re-balancing the economy, public sector financial cuts and economic growth. The financial impact on Middlesbrough Council to date had been cuts of £60.5 million plus £8.9 from the removal of the Working Neighbourhoods Fund.
The Mayor outlined proposals for the 2015/2016 budget which included financial cuts of £14.1 million, a budget requirement of £119,917,000 and further investment of £4.578 million in care for children, young people, older people and vulnerable adults, capital investment and the introduction of the Living Wage. The Local Authority would receive a reduction in Formula Grant of £13.4 million which was a 14.9% reduction. If Middlesbrough had received the average reduction of 1.7%, an additional £6 million would have been available to support services to Middlesbrough residents.
In light of the above priorities and the budget requirement, the Mayor concluded that the Government Council Tax Freeze Grant should be rejected and the Council Tax should rise by close to 2%. Accepting the Freeze Grant would result in a further budget reduction of £400,000 for 2015/2016 and an additional financial shortfall of £17 million over the next ten years.
The Mayor went on to outline the further savings that would be required. From 2011/2012 until 2019/2020 the savings needed would be £145 million without mitigation or £121 million with mitigation.
Details of the impact on services including job losses, reduction and reconfiguration and new service delivery models were outlined. The Mayor also spoke in detail about the challenges to balancing the Council budget and focussed on children's safeguarding, adult social care and income. The Mayor also suggested remedies to the current financial situation including increasing the number of residents in the town by building more houses, which would in turn increase Council Tax receipts and income.
The Mayor stated that there would be more financial cuts over the coming years and no new money would be forthcoming, whoever was in Government, due to the deficit, public borrowing and the fragile state of international and national economies.
In conclusion, the Mayor stated that further financial cuts would be imposed on the Council in future years, the demand for social and health care in relation to children and adults was rising and at best 73%, or at worst 85%, of the Council's budget would be spent on these two areas. Integration and closer working between the NHS and social care was key to dealing with the pressures. The Council had to be self-financing like never before and partnership working was vital.
The Mayor commented that the statistical information and data referred to in his statement was available to all Members on request.
Members asked questions in relation to young people, in particular the Scouts, building on brownfield sites and business rates, to which the Mayor responded.