A LOCAL authority which called for suggestions on how it could generate money to fund key services after coronavirus-related costs left it facing an £8m black hole has revealed a much-improved financial outlook - but it comes at a cost.

Just three months after issuing the alert, Conservative-led Darlington Borough Council has now announced it intends to increase its element of council tax bills by 4.99 per cent from April to balance its books for the coming year.

Darlington MP Peter Gibson said the apparent turnaround was down to Government support packages and “sound financial management” by the council.

The proposed rise will see the average band D property in the urban part of the borough facing having to pay £78 extra for the authority’s services. If the police and fire services increase their precepts as well, average annual council tax bills could climb to about £1,970.

Setting a budget and proposed council tax increase for the next financial year, the council’s leader Councillor Heather Scott told a meeting of its cabinet the impact of Covid-19 had left the council facing “significant financial challenges”, but despite this the authority looked set to be able to fund key services in the medium term, leaving the council in “a stronger position than many other authorities”.

The leaders of Labour, Green and Liberal Democrat groups on the council attending the meeting did not comment on the planned council tax rise.

An officer’s report to the meeting stated the Government had responded with help to offset a large proportion of the pandemic-related costs, but Cllr Scott said funding social care remained a major issue. Some 60 per cent of the planned council tax rise is to pay for spiralling social care costs for vulnerable adults and children.

The report stated the biggest financial pressure facing the council was an increase anticipated for adults with learning and physical disabilities, as costs per placement were significant.

As a result of that, a growing elderly population and other increases in demand for services such as home to school transport, over the next four years, the cost of providing children’s and adults services in the borough will leap from £61m to £67.6m.

Due to the reduction of Government funding over the last ten years, council tax now makes up 61 per cent of the authority’s income and each one per cent increase in its precept means it has £520,000 more to spend.

The meeting heard to balance its books over the medium term the authority planned to further deplete its reserves, but would ensure £5m was held back for emergencies. Cllr Scott said despite the financial pressures the council would continue to invest in services such as street cleaning and waste management as they were “obviously a priority for most of our residents”.

She said funding would also be ploughed into the town centre, for which the authority had received extra funding, and into community safety, neighbourhood renewal and culture. Cllr Scott added: “Economic growth is a key priority for delivering success to Darlington.”