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22
Jun
North Yorkshire Council finance chief: ‘We are not, at this time, in a financial crisis’
North Yorkshire Council’s finance chief Councillor Gareth Dadd has said the authority is not currently in financial crisis — but warned the situation could worsen.
The Stray Ferret asked Cllr Dadd, the Conservative deputy leader and executive member for finance, about the local authority's financial situation this week.
We did so after a committee of MPs said local government finance was in a “perilous state” and Louise Gittins, chair of the Local Government Association, warned that over half of councils could become insolvent next year.
Ms Gittins said next year would be pivotal for many local authorities because that is when the statutory override ends.
The government introduced the statutory override as a temporary accounting measure to enable hard-pressed councils to keep spending deficits relating to special educational needs and disabilities off their main balance sheets.
We asked Cllr Dadd if there was a chance it could become insolvent next year and whether it was affected by the statutory override.
The Conservative politician replied:
We are not, at this time, in a financial crisis. We will have a clearer view on the future once we know how the government’s new funding formula affects North Yorkshire Council. We have very little confidence in a positive outcome.
In terms of statutory override, we have been, as ever, a prudent authority and made provision for the deficit thus far.
We shall be making further statements as and when we have that clearer view.
The council faces a £4.9 million shortfall in the 2025/26 financial year and has warned this could rise to £34.4 million by 2027/28.
A report on the council’s medium-term financial strategy this year said:
“North Yorkshire Council is facing the same spending and funding pressures as most other councils but it is not in financial distress so long as it delivers the savings opportunities (principally, but not exclusively, arising from unitarisation).”
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