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20
Nov 2024
Budget proposals could have ‘very serious consequences’ for North Yorkshire Council
Government proposals in last month's Budget could have “very serious consequences” for North Yorkshire Council amid a tough financial outlook, a senior councillor has warned.
The authority is currently forecasting a £1.7 million overspend for the 2023/24 financial year due to increased demand on services, particularly adult social care.
It already is projected to have a £48 million shortfall over the next four years.
Gareth Dadd, the Conservative executive councillor for finance and deputy leader of the Tory-run council, told an executive meeting yesterday that the financial outlook for the authority in the second quarter of the financial year was “not a very happy tale”.
Among the main areas for financial pressure is health and adult social care, which has a forecast overspend of £7.7 million.
This is partly down to an increase in hospital discharges into adult social care and an increase in high cost care packages.
Cllr Dadd told councillors at the meeting in Northallerton the authority was paying £2.5 million more in costs to deal with discharged patients than before covid.
He said:
It’s quite telling, isn't it, that we had a Budget recently with record investments into the NHS but we seem to be bearing increased costs ourselves.
I’m being slightly political here, but we were promised an integrated care and health system. It seems to me that we’ve got the stickier end of the stick and something needs to change.
We have got to recognise the increased funding to the NHS and we need some help from that.
Budget consequences
Cllr Dadd had previously warned that the government’s Budget proposals may have “very serious consequences” for the authority.
Last month, Chancellor Rachel Reeves announced an increase in the National Living Wage and National Insurance contributions — which the council expects to pick up the bill for.
Ms Reeves also announced £1.3 billion in new grant spending for local government last month.
The Treasury has argued that the pledge represents a 3.2% real terms increase, which includes £600 million set aside for social care.
However, Cllr Dadd told councillors last week that the council expects part of the core funding to be distributed on a targeted deprivation basis, which he said could have consequences for North Yorkshire.
The County Councils Network, which represents upper tier councils in England, said the government intends for £700m to be funded in such a way.
Cllr Dadd said:
We are eagerly awaiting policy direction in terms of financial streams and funding from government, which we are expecting anytime soon.
What we do know is that it’s the government’s intention to use deprivation as a driver in terms of the allocation of that funding.
That could have very serious consequences for this authority and other rural authorities.
The County Councils Network warned that such a move could see funding for its member councils reduced by a third.
Analysis from the organisation said a decision by ministers to dedicate more than half of the £1.3 billion of new funding could mean social care authorities in county and rural areas receive hundreds of millions less funding compared to previous approaches to distributing new resources for councils.
Cllr Tom Oliver, chairman of the network, urged the government to rethink its approach to distributing the funding.
He said:
This would equate to almost £190m less for our member councils - spread right across our entire membership. We all recognise that deprivation is an important indicator of need.
Indeed, that’s why counties already receive 46% less per head in social care grant compared to metropolitan boroughs.
But deprivation is not the main driver of the unsustainable rise in council costs, nor the key measure of who is under the most financial distress.
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