Council budget: Targeting support to make things fairer

The amount of money each Council has to spend depends on several factors, including:

• Government grant
• Council Tax base (South Tyneside has one of the lowest in the country)
• Council Tax level
• Number of new homes built
• Business Rate retention
• Attracting external funding for projects
• Fees and charges

South Tyneside has faced one of the biggest cuts in government funding in the country, forcing the Council to significantly reduce spending since 2010.

In 2025 / 26, the Council will receive 37% of its income from the government and 63% from:

• Council tax
• taxes paid by local businesses (retained business rates)
• savings (reserves)

Due to past funding cuts and higher demand, Councils now depend more on local taxes for their funding.

Government funding has reduced by 51% since 2010. Getting money for only one year at a time makes it very hard to plan long-term services and finances.

The new government has announced it intends to change the way Councils get funding, including:

• providing funding based on needs and deprivation
• change business rates
• start giving money for several years at a time from 2026/27

Further details on these announcements are expected in summer 2025.

External funding

We look for external funding sources to help pay for big projects.

The Council has successfully managed to get funding from the government, including £20 million for Holborn Riverside and another £20 million for Jarrow from the Plan for Neighbourhoods.

We've also managed to get funds such as:

• the UK Shared Prosperity Fund
• Arts Council funding
• support for renewable energy projects

We keep trying to get more funding to bring big changes to South Tyneside.

Working with regional partners, the £4.2 billion devolution deal for the North East gives us important decision-making powers and investment. This helps us make decisions that fit local needs and invest in projects that benefit our residents, communities, and local economy.

We're taking every chance to get extra investment beyond our core funding.

The devolution deal's commitments to building better homes, investing in jobs and skills, transport, and moving towards net zero are key to addressing inequalities in our society.