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20
Jan
North Yorkshire Council has reserves to ride out funding uncertainty, says senior official
North Yorkshire Council has enough reserves to ride out “significant uncertainty” in government funding but must still deliver millions in savings, a senior council officer has warned.
Gary Fielding, corporate director for resources, told a meeting of the council’s executive today (January 20) that the authority would dip into its reserves to cover a £17 million deficit for the forthcoming financial year.
The move comes as the council is expected to hike council tax by 4.99% — the maximum permitted before triggering a referendum.
The council has lost £20 million in base funding, despite lobbying central government for a fairer settlement. It also faces increased pressure from inflation, National Insurance contributions and demand on services such as adult social care.
Mr Fielding said the council was in a "fortunate" position where it can balance its budget, but he warned that it must deliver on £56 million in savings in the coming years.
He pointed out that some authorities in England were expected to apply for “exceptional financial support” from government amid rising costs and demand to avoid issuing a section 114 notice — a measure taken in dire financial circumstances when a council cannot balance its budget.
However, Mr Fielding told senior councillors that the council was not in that position.
He said:
A section 114 notice is not foreseen in the near future despite the significant reductions in government funding. Any inactivity over the next two years on further savings options could, however, jeopardise this position so the council should absolutely guard against complacency.
Mr Fielding added that while the council was able to balance its budget this year, there is still uncertainty over some areas from central government which may later impact its "bottom line".
He said:
While we have a three-year settlement from government, there is still a significant amount of uncertainty.
The decisions around such things as SEND, reform of social care and further definitions on the requirements of a national waste strategy. Those things alone are likely to have a bigger impact on our bottom line than some of the changes that will be at the margins in that three year settlement.
There’s still significant change that we need to factor in and that means being able to provide for scenarios and flex accordingly.
Council tax rise
The move comes as senior councillors recommended a 4.99% increase in council tax for North Yorkshire this morning.
The hike would mean the price paid annually by an average Band D property for council services would increase by £96.78 to £2,036.32.
The total council tax bill is made up of precepts charged by North Yorkshire Council, North Yorkshire Police, North Yorkshire Fire and Rescue Service, and parish councils.
Cllr Gareth Dadd, deputy leader of the authority, said the council’s deficit position would be much worse if it did not increase council tax.
He said:
Each one percent reduction in that council tax increase increase would add a further £5 million a year to the deficit. So play with that figure at your peril.
I do understand how hard it is when we have a headline inflation council tax increase, but that’s got to be balanced with the services that this authority provides especially to those that need them the most.
The council tax recommendation will go to a full council meeting on February 23 for final approval.
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