Sunderland Council mulling 3% council tax rise as energy crisis creates budget shortfall of up to £21 million

The City of Sunderland is facing its own financial crisis as energy costs surge, with an emergency reserve fund set to be depleted by March.

With fears that the city will face a budget shortfall of £21 million in 2023, council leaders are now reportedly mulling another 3% rise in council tax.

As power bills surged throughout the country owing to a combination of the Ukraine war’s squeeze on global energy markets and central government incompetence, the council established an emergency reserve fund of £5.7 million.

But it is proving insufficient, as other costs are also biting too. As well as power bills, an increasing demand for adult social care is also taking its toll, costing £184 million a year, and 24% of the total services budget at £764m.

Whilst appealing to the government for help, Cabinet Secretary Cllr Paul Stewart quoted : “The Council’s financial position, like households and businesses across the country, is being adversely impacted by inflationary and demand pressures and the legacy of Covid.

“While we continue with our City Plan for a more dynamic, healthy and vibrant Sunderland, we have seen our energy costs double in the last year. Further increases are expected and there’s significant uncertainty as we look to the next budget.”