Newcastle councillors are calling on the Government to overhaul an outdated funding formula, as the city faces a £21.8 million council tax shortfall due to its growing student population.
00:00A fresh call has gone out from Newcastle councillors urging the government to deliver a fairer deal for cities hit hard by student-related council tax losses.
00:10It follows new figures showing Newcastle City Council is facing a staggering £21.8 million shortfall this year alone,
00:18a direct result of the growing student population and an outdated funding formula that hasn't been reviewed in over a decade.
00:24Under national rules, full-time students are exempt from paying council tax and while councils are supposed to be reimbursed for that loss,
00:34Newcastle officials say that the government's compensation formula, unchanged since 2013, is no longer fit for purpose.
00:43Back then, the city had just over 6,000 student households. Fast forward to 2024 and that number has more than doubled to nearly 12,500.
00:52Council tax rates have also risen significantly since then, widening the gap between what the council is owed and what it actually receives.
01:02In 2013, the financial hit was around £3 million. This year, it's ballooned to nearly £22 million, more than the council's entire budget savings for the year.
01:12That's why opposition councillor Peter Allen is bringing a motion to the next council meeting,
01:17urging Westminster to update the formula and ensure university cities like Newcastle don't continue to bear the brunt of national policy decisions.
01:27But what do locals think? Should the government consider charging full-time students to pay council tax?
01:33No. I don't think so. No, I don't think they should.
01:38Because they're already paying the loan, aren't they? Yeah.
01:43They don't need any more. Because they won't have full-time jobs either, I don't think.
01:47I agree. Yeah.
01:51What's your reason for that?
01:53Well, you're living there.
01:54I mean, the parents have got money mostly, so why aren't they, Finn?
02:02Is there a can afford it?
02:04Depends where they're coming from, really, doesn't it?
02:07If they had, like, school meals in school, then they should be able to, like, have, like, something, arrangement?
02:13I think if they're coming from afar than that, then definitely I'd, but if they're local and that, then no.
02:20Yeah.
02:21What do you think? I don't know.
02:22I think, I think that's kind of fair. I don't think they should have to pay, personally.
02:26Yeah.
02:26I mean, because obviously they're paying for their accommodation.
02:28I don't think they should have to pay for, like, extra things as well.
02:33Yeah.
02:33That's my opinion.
02:34But, like, you're already paying for your accommodation, so you don't need to pay for other stuff as well.
02:40Yeah. Uh-huh. Yes, uh-huh.
02:42They've got money to come and leave here and spend time studying.
02:47And, um, yeah, they need to pay for the accommodation tax as well, yeah, including, you know, we are a pensioner.
