Durham County Council's £41 Million Savings Plan: What It Means for Local Businesses

Understanding the £41 Million Savings Plan

Durham County Council has announced plans to achieve an additional £41 million in savings over the next four years, supplementing the £209 million already saved since 2011/12. This initiative is part of the council's Medium Term Financial Plan (MTFP), aiming to address ongoing financial challenges.

The savings are structured across the four-year period as follows:

• 2025/26: £18.036 million in savings, comprising £3.389 million previously approved and £14.647 million in new proposals.

• 2026/27: £4.081 million in savings, with £3.184 million previously approved and £897,000 in new proposals.

• 2027/28: £1.288 million in savings, including £754,000 previously approved and £534,000 in new proposals.

• 2028/29: A nominal adjustment of £1,000.

These measures aim to address a forecasted budget deficit of £45.778 million over the MTFP period

How Will The Budget Be Supported?

To support the budget, a 4.99% council tax increase is proposed for 2025/26, including a 2% adult social care precept.

This would result in a Band D increase of £1.86 per week and an increase of £1.24 per week for the majority of Council Taxpayers in County Durham, 56.5% of whom live in the lowest value properties (Band A)

Implications for Local Businesses

While the council aims to minimise the impact on frontline services, local businesses may experience indirect effects:

Council Tax Adjustments: The proposed 4.99% council tax increase could influence consumer spending patterns, potentially affecting local businesses.

Business Rate Relief Changes: The council plans to support small businesses losing rate relief due to property revaluation, potentially benefiting up to 600 businesses.

Public Service Adjustments: Budget constraints may lead to changes in public services, which could indirectly affect businesses reliant on these services.

Navigating the Changes

Local businesses should stay informed about council decisions and consider the following steps:

Financial Planning: Review budgets to accommodate potential tax changes and service adjustments.

Engage with Council Consultations: Participate in public consultations to voice concerns and stay updated on policy changes.

Seek Professional Advice: Consult with financial advisors to understand the implications of council decisions on your business.

Staying proactive and informed will help local businesses adapt to a changing financial landscape in Durham.

Schedule a free consultation with The Tax Faculty today to see how our local team can offer you and your business a bespoke professional financial service that meets your needs.