Councillors will convene tomorrow (February 14) to vote on North Yorkshire Council’s budget for the forthcoming year.

Included in the plan are a proposed council tax hike, cuts to some services and a grim outlook for the authority’s finances over the next three years.

The budget comes at a time when the government has cutback on funding and imposed a hike in National Insurance contributions, leaving council officers looking for millions of pounds in savings.

But what exactly is in the financial plan and what does it mean for residents in the Harrogate district?

Council tax

One of the crucial elements of the council’s budget tomorrow will be a rise in council tax.

North Yorkshire Council has planned a 4.99% hike in the rate, which will mean residents in the Harrogate district will pay more for services from April this year.

Meanwhile, David Skaith, Mayor of York and North Yorkshire, has also proposed an increase for North Yorkshire Police and North Yorkshire Fire and Rescue Service’s share of council tax.

In addition to this, parish and town council precepts will also be included in the bill. For those in Harrogate, it will be the first time that Harrogate Town Council levies a precept on council tax.

It means a Band D property household in Harrogate is likely to pay £2,380.51 in 2025/26 — a 6.4% increase on last year.

You can read our explainer on council tax bills and how this year's increase has been calculated here.

In January, Cllr Gareth Dadd, executive member for finance at North Yorkshire Council, said the authority had “no alternative” but to increase the rate.

Cuts to services

Amid the uncertainty over funding from central government, council officials in Northallerton have planned sweeping cuts to services.

The council plans to make £52 million in savings over the next three years in order to balance its books.

Part of this is due to the loss of government funding, such as the rural service delivery grant which was worth £14.3 million to the council each year.

Some savings will be made through cuts to councillors' locality budgets and staffing reviews and it is hoped income-generating measures, such as the introduction of a lane rental scheme for roadworks, will generate revenue to offset the cuts. You can read our analysis on the proposals here.

This coming financial year, £27.5 million worth of savings will be made and the council intends to use its reserves to cover the £5 million shortfall in the 2025/26 budget.

However, at an executive meeting in January, Cllr Dadd pointed out that the savings needed to be delivered and the council would not be able to rely on its reserves in the coming years.

This is because the council is forecasting its strategic capacity reserves, which is used to mitigate against financial risk and provides resources for investment, would fall from £180 million at the start of the next financial year to £66.4 million by 2028.

Council officials say this is due to forecast deficits of £34.4 million by 2027/28 and planned investments.

How is the council justifying this?

The council says it has lost funding from central government and seen additional costs imposed upon it, which means it needs to balance its books accordingly.

The Conservative-run authority has blamed Labour, saying the government has awarded it “the fourth worst core funding settlement in the country”, behind Herefordshire, Rutland and Shropshire.

The council used to receive the greatest share nationally of the rural services delivery grant with £14.3 million each year.

The £110 million package of funding for councils covering rural parts of England recognised the extra costs they face in areas such as home to school transport.

However, in November, this was cut as the government looked to repurpose the fund to redirect money towards more deprived areas.

Since then, North Yorkshire Council has launched a legal challenge against the government over the loss in funding and described the decision as "unsound".

Meanwhile, Chancellor Rachel Reeves' October Budget announcement that the rate employers pay in National Insurance contributions will rise from 13.8% to 15% on workers’ earnings has also left the council with a £7 million shortfall, even with an estimated £5 million government grant to compensate in this area, said the council.

The government has also increased the National Living Wage, which senior councillors say will add more pressure on council finances.

When will councillors decide on the budget?

Councillors will meet tomorrow (February 14) at County Hall in Northallerton to discuss and vote on the budget.

Opposition Liberal Democrat councillors are expected to propose amendments to the plan, including proposing £5 million from its reserves to fund “innovative intervention” schemes to reduce pressure on services.

The Lib Dems are also expected to oppose the council’s cuts to locality budgets, which the council says could save £450,000 a year.

The meeting will start at 10.30am and can be streamed on the council’s YouTube channel here.