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24
Jan 2023
North Yorkshire Council has reserves to ride out inflation, says senior official
North Yorkshire Council will have enough reserves to ride out another national event such as soaring inflation, a senior council official has said.
Gary Fielding, corporate director for strategic resources at the authority, said the council has planned for a “one-off use” of its reserves to cover a £30 million shortfall for the upcoming financial year.
The council is facing pressures from inflation, rising cost of utilities and taking on structural deficits from other district councils.
Around £18 million from the districts will be taken on by North Yorkshire Council, plus a further £12 million for an in-year shortfall.
As part of the budget plans, the county council will dip into its reserves to cover the financial blackhole.
Despite the use of reserves, Mr Fielding said he felt the council would still be in a good position to withstand another national event, such as a pandemic or soaring inflation rates.
He said:
Part of the council's shortfall is down to energy costs and pay awards.
Energy bills for North Yorkshire’s current eight councils stood at about £6 million in 2021/22, rising to £15.5 million for the current financial year.
They are predicted to rise to £31 million for the forthcoming financial year from April 1.
Meanwhile, inflationary pressures, including pay awards, previously accounted for an increase of about £19 million a year across the eight North Yorkshire councils.
However, the dramatic rise in inflation to more than 10% a year has seen £66 million having to be allocated to next year’s proposed budget to cope with the increase.
Mr Fielding pointed out that other councils were serving section 114 notices - a measure taken in dire financial circumstances.
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Thurrock Council, Slough Borough Council and Croydon Council have all issued such notices, which effectively declare the authority as bankrupt and ban any further spending.
However, Mr Fielding said he felt confident the council was not in that position.
He told senior councillors this morning:
'Heavy heart' over council tax hike
Senior councillors this morning recommended a 4.99% increase in council tax for the entirety of North Yorkshire.
The proposal, which would see a band D rate of £1,759.96 for the year, will go to councillors at the authority’s full council meeting for a final decision.
Cllr Gareth Dadd, deputy leader of the county council, said it was “with a heavy heart” that the authority had to propose an increase.
He said:
The council is proposing the sum in order to meet costs for providing public services across the county.
It has also decided that council tax rates will be harmonised for the next two years – meaning taxpayers will pay the same sum across the county.
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