A North East MP has stated that councils are at “breaking point” after it is revealed that authorities in the region are being forced to splash reserve funding to stay afloat in 2025/26.

FOI data compiled by the BBC has revealed that North East councils are facing a combined shortfall in funds of £207.8m amidst a national shortage of £5bn.

Amongst the worst affected in the region are North Yorkshire Council, facing a £45.3m shortfall, and Durham County Council, which is set to be down £17.7m.

Read more: North East councils facing £200m black hole in budget

No data was provided for Darlington Borough Council or Hartlepool Council.

Councils and politicians from the region have been reacting to the news, with Stockton North MP Alex Cunningham claiming local authorities are at a “breaking point” as councils are forced to dip into reserves to make up the funds.

He said: “For the past thirteen years the Conservatives in Westminster have slashed council budgets to the bone and left councillors and council officers to pick up the pieces and deliver vital services on a shoestring. Now councils, including Stockton on Tees, face massive shortfalls and difficult decisions all because the Government refuse to properly fund them.

“I’m proud of the work our Labour-led Stockton Borough Council has done to protect frontline services, support residents – particularly the most vulnerable in our society – while also maintaining a vibrant cultural scene.

“Local authorities are at breaking point because of Conservative austerity. They made a political choice to slash budgets and every closed library, cut bus service, or reduced waste collection is a result of that. They simply can’t be trusted to fund councils properly.”

Unison has also said councils “simply don’t have the funds to provide even statutory services” and some would not be able to offer the “legal minimum of care” next year.

North East councils are already planning to make more than £105m in savings this year and are having to use a combined £82m worth of reserves to balance the books.

Labour MP for the City of Durham, Mary Kelly Foy, claims that Conservative austerity has caused “deprivation” in the region.

She said: “These figures are alarming but unsurprising given the way Tory and Liberal Democrat austerity ravaged council budgets. 

"Now for thirteen years, Conservative-led governments have continued to wilfully neglect local government, hollowing out public services, and causing hardship and depravation in our communities.

"In recent years Durham County Council has seen 40p cut from every £1 they previously received from central government. This funding blackhole is the natural consequence of those political choices.

"More bruising cuts will be devastating for Councils. In the absence of fair funding the Government needs to be honest with the public as to where it wants the axe to fall. Is it proposing slashing care for the elderly, or perhaps reducing vital services for children?"

For Dr Antony Mullen, Leader of the Conservative group on Sunderland City Council, the concerning shortfalls have only been worsened by the war in Ukraine and the cost of living as the authority is set to cope with a £20.5m shortfall.

He said: "Local government has been hit by the inflation caused by the COVID pandemic and the ramifications of the war in Ukraine.

"This has led to increased energy prices, increases in materials needed for capital projects and so on.

"This is a nationwide issue that requires a national response."

Sunderland City Council’s Cabinet Secretary, Councillor Paul Stewart, stated the reason for the shortfall was down to funding reductions from the current government.

He said: “It’s widely recognised that local government suffered some of the biggest budget cuts under the coalition Government’s austerity programme after the 2010 General Election.

“Cities like Sunderland had to bear disproportionate funding reductions and we’ve lost around a third of our spending power over the last 13 years.

“Now, post-covid and with the cost-of-living crisis and inflation, there is less and less room for manoeuvre for all councils, including us here at Sunderland City Council.”

Jeff Garfoot, Durham County Council’s head of corporate finance and commercial services, confirmed the authorities' £17.7m shortfall covers 2024/25 and 2025/26, stating the council will "minimise" the impact on residents.

He said: "Like all councils nationally, we are facing unavoidable financial pressures driven by rising costs often linked to the current high levels of inflation and increasing levels of demand, particularly for adult and children’s social care.

“Despite some additional forecast government funding and assuming that there will be continued annual increases in council tax, we now forecast that we need to make £28.3 million of savings over the next two years, a deterioration on the £17.7 million shortfall forecast in February 2023.

"We will continue to seek to minimise the impact on front-line services, however, without further funding from Government, some of these services will be more affected in the coming years."

Read next:

Get more from The Northern Echo with a Premium Plus Digital Subscription for as little as £1.50 a week. Click here.

Deputy Council Leader of North Yorkshire Council, Cllr Gareth Dadd, reacted to the shortfall by assuring residents services will be protected.

He said: “Our priority will always be the protection of services that deal with vulnerable adults and children's social care.

“We will develop a plan to kerb this because clearly £100m use of reserves to plug a black hole in our budget for the next three years is not sustainable.”