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05
Nov
Council faces ‘deteriorating’ finances amid Budget, deputy leader warns
North Yorkshire Council could face deteriorating finances following this month’s Budget, its deputy leader has warned.
Chancellor Rachel Reeves is due to announce her Budget to the House of Commons on November 26.
Cllr Gareth Dadd, Conservative deputy leader and executive councillor for finance at the council, said the authority was “eagerly” awaiting news from the Chancellor alongside a policy announcement on fairer funding for councils.
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.
However, in a statement due before full council next week, Cllr Dadd said that the authority could face another loss of £18 million a year in funding as part of a government fairer funding review.
Cllr Dadd said:
As explained to members, the impact is not good for North Yorkshire — and other super-rural places — and it looks like we will lose something like another £18m per annum of funding after we lost £14.3m on rural services grant in this year.
I am also aware of some speculation ahead of the policy announcement that changes are afoot to help inner London councils and that is likely to be to the detriment of “remoteness”.
If that is the case then we can expect the situation to deteriorate even further for this council.
Savings being identified
He added that the council’s executive was “very much into the process” of identifying potential savings.
The move comes as Cllr Dadd previously warned that the council faces dipping into its reserves to cover costs over the next three years.
As a result, the authority faces spending £57 million of its reserves by March 2028 to cover the cumulative deficits, Cllr Dadd said.
The figures sparked concern among opposition councillors, who have called on the current Conservative administration to get a grip on the situation.
Cllr Peter Lacey, leader of the Liberal Democrat group on the council, warned that the council is “heading towards an iceberg” if it did not address underlying issues with its finances.
The council is due to set its budget, which includes council tax, for the forthcoming year in February 2026.
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