Subscribe to trusted local news
In a time of both misinformation and too much information, quality journalism is more crucial than ever. By subscribing, you can help us get the story right.
- Subscription costs less than £1 a week with an annual plan.
Already a subscriber? Log in here.
20
Aug
North Yorkshire Council to dip into its reserves for £57 million amid 'worsening situation'
North Yorkshire Council’s finance chief has warned that the authority faces a "worsening situation" amid a forecast £57 million use of reserves.
Cllr Gareth Dadd, the Conservative executive member for finance, told a meeting in Northallerton that the council would have to dip into its reserves to cover costs over the next three years.
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.
As a result, the authority faces spending £57 million of its reserves by March 2028 to cover the cumulative deficits, Cllr Dadd said.
The council's forecast financial position over the next three years. Picture: North Yorkshire Council.
He added that this is before the council had to factor in a government fairer funding review, which he warned is likely to give it a “worsening situation”.
Cllr Dadd said:
The strong message is, be prepared for the most severe budget round that this authority and its predecessors has ever faced.
A revenue report before the executive today said the council had already started to earmark potential savings before the government review is completed.
It said:
The government is currently consulting on proposed changes to local government funding which is likely to result in less funding for North Yorkshire. As a result, work has already begun on identifying potential savings that will not only help reduce the current medium term financial strategy gap but also help to mitigate against changes to local government funding.
The move comes as Cllr Dadd told the Stray Ferret previously that the council was not currently in a financial crisis, despite warnings that some councils face insolvency due to an end to statutory overrides next year.
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.
In June, the Stray Ferret 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.
0