Our Budget

We work hard to provide over 600 services to residents and businesses across Sunderland, but we continue to face challenges as the uncertainty around government funding continues.

The majority of our funding comes from government grants. While we are pleased to hear recent announcements regarding local authority funding and the recognition that the new government is giving to councils with the greatest need and demand for services, the core government funding we receive has reduced by over 25% in real terms since 2010/11.

Alongside this reduction in income, our costs continue to increase and pressures on our services grow particularly the services we must continue to deliver and fund to support our vulnerable adults and our children. We also understand many of our residents are facing continued financial challenges and pressures.

These sustained challenges we are facing mean we need to make some difficult decisions, now and in coming years. For the financial year 2025/26, after taking into account an assumed council tax increase in line with the Government's assumptions for local authority funding, we estimate a gap of over £22 million between the money we receive and what we need to spend to deliver these vital services. We have been using some of our reserves to lessen the impact of this funding gap. For 2025/26 we plan to use £9 million from our reserves, leaving a gap of just over £13.5 million. Over the next four years we would see a total gap of over £64 million.

We cannot meet this gap without making some difficult decisions. In some cases, proposals we are considering this year will include changes to how we deliver some of our services.

It is vitally important that we hear from you, our residents, on what you think about our suggested approach. We need to ensure we continue to create a city where everyone can live, work and play, while understanding what your priorities are to help us deliver changes and see lasting impact and improvements.

To help you answer the questions, we've provided more information about what our proposals include and the context below.

Costs are increasing

Continued increases in demand on adult social care and increasing costs in both children's and adults social care mean we face further need in areas where we already spend the most. We also know that Sunderland has an ageing population that will continue to put strain on the adult social care services we offer, where we already spend more than a quarter of our budget.
Increases in inflation and interest rates mean it costs us more to provide services and to borrow money to invest in things like our regeneration programmes.
Previous substantial increases in utility costs means it costs us significantly more to operate our buildings and venues, to maintain street lighting, and to fuel our vehicles including refuse and recycling trucks.
Nationally agreed staff pay awards and increases in the national and real living wages and increases to employers' National Insurance contribution rates mean our staffing costs increase as do the costs of services which we commission.

To address these challenges, we need to try to increase our income at the same time as reducing our costs.

Increasing our income

Did you know: the council tax we collect accounts for less than 17% of our total income

We understand many of you are also facing challenging decisions. One of the ways we can increase our income to meet some of these challenges is through raising council tax.

The Government has indicated that the limit for council tax increases for 2024/2025 will be 4.99% - composed of 2.99% core council tax for helping fund day-to-day services and 2% for the Adult Social Care Precept.

We have made our proposals on the basis of an increase of core council tax of 2.99% to help fund day-to-day services and 2% for the Adult Social Care Precept. thereby providing funding so that we can support our most vulnerable residents. This would mean that a household living in a Band A property would be paying £1.10p more per week whilst a household living in a Band D property would be paying £1.65p more per week. For households in receipt of council tax support or single person discount these increases would be much lower. Even after this increase, we would keep the lowest Council Tax rate in the North East.

Our proposals also consider other ways we could generate more income, including:

Maximising trading and commercial activity income; and
Reviewing fees and charges

Cost saving proposals

Because council tax is a small proportion of our income, this increase alone will not address the funding gap. We need to consider some difficult decisions in how we cut our spending at the same time as trying to maximise our income. In some cases, the proposals we are considering this year will include changes to how we deliver services and staffing.

We also have to take into account that some of our spend is outside of our control. This includes things like funding for maintained schools, housing benefit payments and the provision of statutory services to our most vulnerable adults and children.

If we look at every £100 the council has to spend, around £70 of this covers these services. This leaves £30 which the council can control for day-to-day services.

We want you to share your views on our proposals as well as letting us know if you have any other suggestions for cost savings that would make a significant impact on our funding challenge.

Some of our proposals include:

Reshaping and changing the way we deliver our adult social care services, providing a saving of nearly £3 million in 2025/2026;
Reviewing the way we deliver our services including service operating models and the deletion of vacant posts;
Moving to more efficient ways of working allowing for business practice improvements; and

You can read the full detail of our approach here.

The consultation is now closed. Thank you to the residents who took the time to share their valuable feedback.