Our Budget

We work hard to deliver over 600 services to residents and businesses across Sunderland, but we continue to face challenges as the uncertainty around government funding continues.  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 is growing, particularly the services we must continue to deliver in order to support our vulnerable adults and our children.

The sustained challenges we are facing mean we need to make some difficult decisions, now and in the coming years. For the financial year 2026/27, after taking into account an assumed council tax increase of 4.99%, in line with the Government's assumptions for local authority funding, we estimate a gap of just under £15 million between the money we receive and what we need to spend to continue to deliver these vital services. In recent years, we have been using some of our reserves to lessen the impact on services, and for 2026/27 we plan to use a further £9 million from reserves, reducing the gap to just under £6 million. Over the next four years we anticipate a total gap of over £43.227 million.

We cannot close this gap without making some difficult decisions.

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 demand and 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 relatively high interest rates mean it costs us more to provide services and to borrow money to invest in things like our regeneration programmes
• Increases in utility costs over the last few years 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 

One of the ways we can increase our income to meet some of these challenges is through raising council tax. 

The council tax we collect accounts for approximately 16% of our total income.

The Government has indicated that the limit for council tax increases for 2026/27 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 based our proposals on the maximum increase allowed of 4.99%, thereby providing funding to continue to deliver the best services possible whilst also supporting our most vulnerable residents. 

This increase would mean that a household living in a Band A property would be paying £1.15p more per week whilst a household living in a Band D property would be paying £1.72p 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 relatively small proportion of our income, this increase alone will not address the funding gap. We need to consider some difficult decisions about cutting 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:

• Proposed increase in parking charges for off-street car parks which will be used to offset the potential change to the parking offer of an hour free and Electric Vehicles parking.  This will provide a saving of £0.100 million in 2026/27
• Utilisation of external funding to support Low Carbon activity by the council, replacing revenue resources within the council's current budget.  This will provide a saving of £0.500 million in 2026/27

Complete our budget consultation survey

To find out more details about the budget proposals, please see the Cabinet report (opens new window).