A council says a proposed five per cent tax increase is necessary to help cut its huge deficit, as key services are hit by significant cost pressures.  

Councillors on Durham County Council’s cabinet approved its latest budget report at a meeting on Wednesday, which includes raising council tax by 4.99%.  

The proposed tax increase would see band A-C households pay between an extra £1.12 and £1.50 per week but would help cut the council’s £52 million deficit by around £10 million.  

A council tax rise of nearly five per cent will raise £5.1 million between 2023-2024 and by £2.6 million between 2025-2027, reducing the shortfall by £15.4 million over the whole period. 

Local authorities throughout the North East have joined the council in implementing similar tax increases after receiving new powers in the Autumn Statement. 

Read more: County Durham residents could face 5% council tax rise in bid to cut huge deficit

Households throughout County Durham can expect to pay a further £90 a year, but council leader Amanda Hopgood defended the decision.  

The Northern Echo: Cllr Richard Bell and council leader Amanda Hopgood say the rise is much-neededCllr Richard Bell and council leader Amanda Hopgood say the rise is much-needed (Image: Sarah Caldecott)

“The scale of the challenges we face in terms of the unavoidable cost pressures should not be understated,” she told the meeting.  

“Increasing council tax is a decision that should not be taken lightly, however not increasing council tax is simply not a sustainable or prudent strategy to adopt. If we didn’t increase council tax our budget and position would be much worse.  

“In the absence of more funding being made available by government it effectively becomes a binary choice of implementing tax increases versus cuts to vital public services.” 

Around 54,000 households on low incomes will be protected from any increase. 

However, Labour councillors have criticised council leaders for making the public pay more.  

The Northern Echo: Labour criticised the proposed 5% council tax rise throughout County Durham Labour criticised the proposed 5% council tax rise throughout County Durham (Image: The Northern Echo)

Labour Leader, Cllr Carl Marshall, said: “Once again the ‘party of low taxes’ demand that the people of County Durham pick up the tab for their own and their government’s mismanagement of the public purse. 

“The Tory-led Coalition running Durham County Council would rather put its hand in the pockets of residents already financially crippled by the cost-of-living crisis and fallout from Kwasi Kwarteng’s disastrous mini budget, than call out its government and demand it do more.” 

Yet Cllr Hopgood praised the Liberal Democrat, Conservative and Independent coalition’s ‘sizeable savings’ since coming into power last year.  

Cllr Hopgood added: “Ranting about government policy is not going to deliver a viable budget for next year but does highlight many years of Labour failure when running the council. The joint administration has already made sizeable savings and continues to explore other ways to reduce outgoings, while protecting front line services and sustaining investment. 

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“The joint administration is taking action here in this county, to look after our vulnerable people, rather than regurgitating rhetoric time and time again that is simply not supported by the facts.” 

Alongside the council tax rise, the authority says government funding, taxbase growth, and updated base budget pressures will reduce the shortfall to £41 million, with £25 million falling into 2023/24. The further £13 million deficit will be paid using council reserves. 

A final decision on the council tax rise will be made by councillors in February.