Durham County Council warns of 'difficult' budget decisions ahead to avoid bankruptcy

Durham County Council is facing more cuts to its budgets. Credit: ITV Tyne Tees

Council chiefs have said that they will have to make "difficult decisions" if they are to avoid going bankrupt.

Durham County Council has said it is facing a shortfall of £42.183 million over the next four years.

Councillors have warned cuts could "impact on frontline services."

There are also plans in February to approve a 4.99% increase in council tax.

Conservative councillor Richard Bell, the cabinet member for finance, told a cabinet meeting: “This will require some very difficult decisions being made, and these may well impact on frontline service delivery.

"We have no choice though to grasp this nettle and make tough decisions as the alternative would lead to a Section 114 position – something we simply cannot countenance.”

Mr Bell added that the council had lobbied central government and applied for extra funding but had been unsuccessful.

He argued the £6 million increase of the council’s core spending power is misleading due to the high demand for social care services and inflationary costs. 

Paul Darby, corporate director of resources, told councillors that failing to increase council tax “would not be a strategy I would recommend and would create a significant budget challenge.”He added that despite the measures, there remains significant financial uncertainty beyond 2025. The council’s reserves have previously been used to balance the budgets but that is not sustainable, the meeting heard. “Utilising £6.5 million of reserves to balance the budget next year is not a sustainable budget strategy and comes on the back of using £10 million of reserves in the current year," Mr Darby added. Residents on low incomes are being told that they can continue to apply for the council’s Council Tax Reduction Scheme.

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