Plea for 'fairer' deal as £21.8m student council tax gap revealed

A "FAIRER" deal is needed to cover a multi-million pound council tax shortfall caused by the significant increase in Newcastle's student population, councillors have warned.

- DANIEL HOLLAND

City politicians are calling for the Government to step in with extra funding to cover a £21.8 million burden faced by Newcastle City Council.

Full-time students are exempt from paying council tax and the Government reimburses local authorities to compensate them for the resulting loss of income. But councillors have complained the formula used to calculate that compensation has not been updated since 2013/14. Since then, the number of student households in Newcastle has more than doubled and council tax rates have also increased substantially.

Council figures seen by the Local Democracy Reporting Service (LDRS) show the city’s net annual loss from student exemptions at that time was £3 million. But the gap between the lost council tax income and the reimbursement Newcastle gets from the Government has since spiralled to £21.8 million in 2024/25 - a figure higher than the £21 million budget cuts being made at the civic centre this year.