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13
Jan
North Yorkshire Council plans council tax hike amid £17m shortfall
North Yorkshire Council is set to increase council tax by maximum amount amid a £17 million shortfall.
The move forms part of the council’s budget plans for the 2026/27 financial year.
Council officials have recommended that council tax is increased by 4.99% — the maximum permitted before triggering a referendum.
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.
Mayor of York and North Yorkshire, David Skaith, has yet to set the precept for police and fire services.
The move comes as the council is forecasting a £17 million shortfall for the next financial year, which it plans to cover using reserves.
Cllr Carl Les, Conservative leader of the council, said the authority had lost £20 million in base funding, despite lobbying central government for a fairer settlement.
He said:
We have petitioned the government to ensure that we get the fairest possible funding settlement, but we have still been left with a multi-million pound shortfall.
All councils are facing a tough financial situation, but delivering services across deeply rural areas such as North Yorkshire costs more.
We have lost nearly £20 million in base funding when compared to last year, and this is significantly higher when inflation is factored in. There will undoubtedly be tough decisions ahead when we come to consider our budget for the next financial year and into the future.
The move comes as Cllr Gareth Dadd, the council’s deputy leader, had previously warned of a “deteriorating” situation for the council’s finances.
According to the authority’s budget papers, which will be put before senior councillors next week, the council faces using £59 million in reserves to balance its books by 2028/29.
It comes as the government scrapped the rural services delivery grant, which was worth £14.3 million in funding each year to North Yorkshire.
Cllr Gareth Dadd, speaking at the 2024 LGA Conference in Harrogate. Pic: LGA Joe Outterside
The council also faces rising National Insurance contributions and increased demand for care of older people, working age adults and children and young people.
Meanwhile, the council is planning to make £28 million in savings over the next three years to help mitigate the cost of using its reserves.
The authority expects to make further savings associated with the move to a unitary authority, but a report due before senior councillors said this was now delivering “diminishing returns”.
As a result, council officials have been forced to identify further savings in other areas.
Cllr Dadd said:
We are fortunate that we can make services as efficient and cost-effective as possible for our taxpayers through the launch of North Yorkshire Council, when eight former authorities merged into one in 2023.
However, the truth is that we are faced with some very difficult options to ensure that we can provide services as effectively and as efficiently as we can to the public.
Members of North Yorkshire Council’s executive are due to meet next Tuesday (January 20), to discuss the proposed budget.
If approved, it will be considered at a full council meeting next month, before it is adopted by the council.
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