Council Deputy Leader warns "difficult decisions" lie ahead as plans set out to address budget gap

Stockton-on-Tees Borough Council is facing "unprecedented" challenges as budget discussions get underway, its Deputy Leader has warned.

The Council's Cabinet will consider a report on finances next Thursday (December 11).

And the report shows that demand for services and cost pressures are increasing, whilst showing no signs of slowing down.

It's currently anticipated the budget gap for 2026 to 2027 will be £11.5 million, with a projected overspend of £4.127 million in 2025 to 2026, predominantly caused by demand pressures related to adults and children's social care services.

But plans are underway to ensure the budget gap is addressed through modernising services.

"We are in a similar position to Councils across the country and are facing significant and unprecedented budgetary challenges," said the Council's Deputy Leader, Councillor Paul Rowling.

He continued: "Among the main reasons for the strain on the budget is the increasing demand for adult services, including services like residential placements for older people and those with learning disabilities, as well as care at home services for people with mental health conditions.

"Plus, there's an increasing number of children coming into our care, as well as demand for services like short breaks provision and respite care for children with disabilities. In addition to this, we are seeing huge increases in cost, such as the average cost of an external residential placement rising by 70 per cent since 2021 to 2022."

The Council's Powering our Future Programme has already identified savings of £5.8 million by 2026 to 2027 and has been able to use reserves to fund some of the growing demand in services, but Councillor Rowling warned that the use of reserves in this way cannot continue.

He explained: "We cannot continue to use our reserves as eventually this money will run out. The Medium Term Financial Plan in February will set out how we will plan to ensure the reserves will be replenished.

"Ultimately, closing the budget gap this year and in future years will be extremely challenging, so we know the importance of having a clear and sustainable plan."

How does the Council plan to close the budget gap?

Councillor Rowling said: "There's work underway across the organisation to help make the significant savings which are required - and the Powering our Future programme has identified £5.8million worth of savings by 2026 to 2027.

"There are lots of recent examples of how the Powering our Future programme can make worthwhile savings, such as the modernisation of the fostering service to improve the support available for existing carers. By doing this we are aiming to match children to carers within the Borough to reduce the need for expensive external residential placements.

"We are also embracing the use of AI technologies, such as 'Magic Notes', which saves social workers time on administrative tasks.

"Alongside this we are always looking for new ways to deliver savings, which can be supported through the Powering our Future programme.

"However, in order to address the significant challenges we face, we know that some difficult decisions do lie ahead. The Powering our Future programme must now be accelerated and broaden to include a strengthened programme of service reviews, efficiencies and cost reductions. Our focus now will be on prioritising and modernising our services to ensure they are fit to deliver the very best for our communities whilst also securing value for money within the budget available.

"This work will take place alongside carefully planned and time limited use of reserves with a clear strategy to replenish them.

"There'll be a further budget report going to Cabinet in February where this will be covered in greater detail."

Get ready to have your say on the budget

Stay tuned to the Council's news and social media channels for more information to come on a budget consultation launching later this month.

The consultation will invite residents to have their say on how the Council should prioritise its spending.

The consultation is set to go live on Monday, December 15.

And there's also an update on the demolition of the Golden Eagle

The budget report also contains an update on the demolition of the Golden Eagle in Thornaby, which has been underway since August.

It outlines that despite the Council securing the building with metal sheeting, hoarding and installing signs to warn of the presence of asbestos, individuals entered illegally and committed extensive criminal damage in the period between asbestos surveys and work commencing which has caused the spread of hazardous materials throughout all levels of the building.

Upon the work starting, further break-ins were discovered which caused a water leak with significant water damage, vandalism and further spread of asbestos.

This has subsequently contaminated the entire building, furniture and furnishings, with all items being classed as hazardous waste.

These findings mean the completion date for the project will now be pushed back until Autumn 2026, with an additional cost of £600,000 due to the extra asbestos removal.

Other schemes within the Thornaby Town Deal programme will deliver the full scope of works and have underspent, so Cabinet will be asked to utilise £500,000 from the cycleways workstream and £235,000 from the housing improvements to complete the demolition of the Golden Eagle.

This has been endorsed by the Town Deal Board.