Council Tax in Gateshead 2024/25

Increase to Council Tax in Gateshead

Our 2023/24 budget resulted in a Council Tax increase of 2.99% for Gateshead residents in respect of our expenditure. There was an additional increase of 2% for Gateshead residents in respect of the Government's charge for adult social care expenditure.

This resulted in a combined Council Tax increase of 4.99% for Gateshead residents (excluding precepts from the Police and Crime Commissioner, Fire Authority and Lamesley Parish). This represented a £1.26 a week rise for the majority of Gateshead residents, living in the lowest-value properties (Band A). The rise was £1.89 a week for those in Band D.

Increasing Council Tax is a difficult decision which is never taken lightly. An increase of 4.99% will raise £5.2 million of funding which will help fund essential services. However, this is still nowhere near enough. We have balanced our 2023/24 budget using reserves of £25.8 million along with almost £13.1m budget cuts.

Visit our Budget 2024-25 pages for more detailed information about the budget and the increase to Council Tax.

Cuts to services

Since 2010, the Government has significantly reduced the amount of money it gives to local authorities. We have lost 56% of the budget we have for services over the last 13 years and now have £977 less to spend per resident. In addition to funding cuts, we have more demand for services like adult social care and care for vulnerable children. Costs arising from Government policy changes, like the National Living Wage and welfare reform, also have a big impact on our finances. Like many organisations, we are also seeing cost increases due to inflation and increasing utilities costs.

The reduction in funding from Central Government has meant that we have had to significantly change the services we provide for local people. In some areas services have been reduced and in others we have had to identify alternative ways to ensure services, such as libraries, can still be offered.

Council Tax, although really important, does not cover all the costs of running our services. In fact, it is only about 40% of our income.

The Government intends to make local authorities more self-sufficient by funding all local services through Council Tax and business rates. This method of raising money shifts responsibility onto local tax- and rate-payers.

Council Tax rises and the social care system

The Government has recognised that there is an urgent need to tackle immediate budget pressures in social care. There are now more older people in our population than ever before. Social care helps support vulnerable and older people to live at home independently or in care homes. Although you may not use social care services now, you or someone in your family is likely to need them in the future.

The Government introduced the 2% charge on Council Tax payers to raise much-needed funding. However, social care is in crisis nationally and needs a sustainable funding solution. To help address this issue we are looking at new ways to manage social care services. We are working closely with our partners in health and local communities to ensure people can live in their own homes longer with or without support.

We believe that the national system of funding social care from Council Tax is flawed. This is essentially a national tax applied locally. There is no link between where money is raised and where the need is. Also, the system favours wealthier areas of the country as they are able to raise more money from a higher number of higher band properties. The amount of extra Council Tax income that the 2% social care precept brings us does not come close to meeting the increasing demand for services that care for elderly and vulnerable people.

Information about precepts

Adult social care

'Adult social care authorities' are local authorities which have functions under Part 1 of the Care Act 2014. These authorities are county councils in England, district councils for an area in England for which there is no county council, London borough councils, the Common Council of the City of London, and the Council of the Isles of Scilly.

Adult social care authorities can charge an additional 'precept' (meaning a rule for an action) on Council Tax without holding a referendum.

For 2024 to 2025, the maximum permitted increase in the adult social care precept is 2%.

For adult social care authorities, Council Tax demand notices show two percentage increases:

• one for the part of the overall change for the adult social care precept
• one for the part for general expenditure

The adult social care precept contribution of £2,237,842 will help reduce the funding gap in the adult social care budget.

How we calculate the increase

We calculate the increase across the whole charge, not just the individual adult social care precept. 

The overall increase for Gateshead Council, including the adult social care precept, is 4.99%. This includes an increase of 2.98% for Gateshead Council budget and 2% for the adult social care precept for 2024 to 2025. 

These increases are shown on the bill as 2.9% and 2%.

This example shows the calculation for increasing the charge for a band D property:

• adult social care precept for 2023 to 2024 was £272.70 and the Gateshead Council precept was £1797.84 - a total of £2,070.54
• adult social care precept for 2024 to 2025 is £314.11 and the Gateshead Council precept is £1,859.66 - a total of £2,173.77 

When comparing precepts across financial years it may appear that the percentage increase to each precept is higher - 2% for the adult social care precept and 2.98% for Gateshead Council. This is because the percentage increase is applied to the whole charge for the previous years rather than individual precepts.

Police and Fire Authority

The Police have increased their Band D precept by the maximum amount available which was £13 per Band D, shown on the bill as 7.7%. 

The Fire Authority has increased their Band D precept by £2.76, shown on the bill as 2.9%.

Funding alternatives to Council Tax

We have already reduced our workforce by around a third, as well as the number of buildings we own. We will continue to look at new ways to work more efficiently. We continue to seek ways to raise new funding by promoting a growing local economy through new businesses and new housing as well as increasing trade and investment income.

Use of Council funding reserves versus increases to Council Tax

Just as you would not want to use personal savings every month to cover a reduction in household income, reserves are a limited option for funding services. Reserves can be used short term in a planned way to lessen the impact of budget cuts and allow time to plan or they can be used to fund activities that lead to more income or savings.

Permanent forms of increased income, such as Council Tax or budget cuts, must be made to find a sustainable solution to the council's finances.

Help with Council Tax

We understand the impact of a Council Tax increase on some of the most vulnerable in society and particularly those on fixed incomes, especially during a cost-of-living crisis. However, a combination of continued cost pressures and significant funding reductions has left us with little choice but to consider an increase to Council Tax to protect the delivery of essential council services to the residents of Gateshead. In November 2022, we agreed to continue to provide the current Local Council Tax Support Scheme, which enables targeted support for those residents likely to be most affected by the increase.

If you are on a low income you may be able to get some help to pay your Council Tax. For example, we have a local Council Tax Support Scheme, which currently helps over 20,000 residents on a low income with a reduction in their Council Tax.

For 2023/24 we have been awarded £525,000 of funding to reduce the liability of Local Council Tax Support claimants (pensioners and working-age claimants) by up to £25.00. The reduction will be allocated at annual billing and throughout the year for any change of circumstances. This will affect around 20,000 households.

Non-payment of Council Tax

Anyone who is liable for Council Tax must pay - it's against the law not to. The Council Tax team can help you if you are finding it hard to pay. Please contact the team as soon as possible to discuss alternative payment options and other ways to help you pay. However, if you are able to pay and choose not to, we will start legal action against you. If you do not pay your Council Tax we may take enforcement action which could result in money being deducted directly from your pay. Or we may use external enforcement agents, which can incur additional costs that will be added to your account.

If you are on a low income you may be able get some help to pay your Council Tax through Council Tax Support. If you need help, submit an enquiry or phone us on 0191 433 4646.

Further information on help with the cost of living.

You can also get in touch with Citizens Advice Gateshead (opens new window) for help and support.