You may have read stories in the local press lately about the state of Darlington Council’s finances (https://www.thenorthernecho.co.uk/news/23897943.warning-black-hole-darlington-councils-finances/).
The new Labour led administration have warned that there are rough times ahead, but the former Conservative leader of the council has been at pains to point out that they built up reserves of more than £23 million before they left office – implying that they managed the finances well.
As with most things to do with economics or politics, it’s not that simple, so we thought we’d give an explanation from our perspective.
Darlington Council’s income comes from central government grants, residents’ council tax, business tax and income from council-owned facilities like the Dolphin Centre.
Some council spending is statutory, like social care for children and adults, neighbourhood services like libraries and rubbish collection, plus some aspects of transport, housing and education. Councils spend the little that’s left at their own discretion.
Since 2010, government grants to local authorities have steadily reduced, making things really difficult for councils, and putting discretionary services at great risk. The grants were cut by 40% in real terms between 2009/10 and 2019/20, from £46.5bn to £28.0bn (2023/24 prices).
However, during the pandemic, there was extra funding from the government (including things like business rates compensation and money to introduce free parking schemes).
These extra funding streams have now ended. And other costs are increasing, especially on things like adult and social care (which makes up 75% of council spending). It is a national trend that these cases are getting more and more complex – making it more and more difficult for the council to provide statutory services to the minimum standards, and putting discretionary services in severe jeopardy.
Before losing control in the May elections, the former Conservative Council set a four-year budget which would overspend by £7.5 million a year and wipe out the £23 million reserves.
Take free parking, for instance. During the pandemic, the Tees Valley Combined Authority (TVCA) gave the council funds to provide free car parking to encourage people back to the shops – but for two years only. In this year’s local election campaign the Conservatives pledged to keep free town centre parking, despite the fact that the external grant to fund it had ended, and it would have cost the council £1.7 million a year – and they did not account for it in the budget they set.
The budget set by the Conservatives before leaving office would leave the borough bankrupt by 2027. So far, the new Lab-Lib council has not revealed any plans it might have to prevent this catastrophe, which could mean the Government taking over and selling-off council assets and massively increasing council tax.
Nationally and locally, Greens have a reputation for common sense policies and for taking a long-term, balanced view. Our seven Green councillors will do all they can to hold the council to account and to influence the vital decisions that need to be made in the coming four years.