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14
May
North Yorkshire Council drops £14 million legal challenge against government
North Yorkshire Council has dropped a legal threat against the government over the removal of a £14.3 million rural services delivery grant.
The government announced in November 2024 it was axing the £110 million fund, which helped councils cover the extra costs of delivering services in rural areas.
In February, Cllr Carl Les, the Conservative leader of the council, said a letter before action had been sent ahead of the authority seeking a judicial review of the decision.
Cllr Les claimed the decision was “unsound” and there was “no evidence that services in rural areas cost more to deliver”.
At the time, the authority said the loss of the £14.3 million grant and an increase in employer national insurance contributions had left the authority with a £5 million shortfall which it would need to cover from its reserves.
Barry Khan, assistant director for legal and democratic services, sent a letter to government in February challenging the decision to scrap the grant. The letter was also circulated to North Yorkshire’s MPs.
However, the council has now dropped the legal threat.
In a statement to next week’s full council meeting, Cllr Les said there was “little point” in continuing with the judicial review.
He said:
The withdrawal of rural services support grant is very difficult for us, and the reasons for it were perverse so worth challenging.
However, as I have been offered a meeting with the local government minister where we can make our case about rural costs and funding, there is little point in continuing with this judicial review.
At the end of the day the government can make decisions however much we disagree with them.
Cllr Les added that he intended to brief the county’s MPs on the decision.
The Ministry for Housing, Communities and Local Government defended the latest local government settlement, saying councils with a significant rural population would receive around 5% more in core spending power during the next financial year.
Ministers said the rural services delivery grant did not properly account for rural need and a large number of predominantly rural councils received nothing from it.
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