North Yorkshire County Council looks set to approve a 3.99% rise in its council tax demand, despite its leadership acknowledging numerous residents would struggle to afford the increase.

The council’s Conservative-run executive unanimously recommended that the authority sets a £56 rise in its precept for the average Band D property.

A final decision on the council tax bill will be made at a full council meeting in February.

It means average households will have to find £1,467 to pay for the council’s bill, alongside other expected increases by Harrogate Borough Council and police and fire services.

Several members of the executive highlighted the “cost of living challenge” facing residents, and the meeting heard the squeeze on household finances was forecast to tighten.

Cllr Gareth Dadd, the authority’s executive member for finance, said the county council’s precept was “already behind the curve”, having increased by 33% over the past 11 years while inflation had risen by 38%.

He said he accepted that “there will be many that struggle” with the council tax rise, so the proposed rise would be 0.5 per cent less than the maximum the government would allow the authority to levy without holding a referendum.

Cllr Dadd said: 

“We have a moral duty both to our vulnerable and the residents and the services that we provide as well as a moral duty to look after the taxpayers’ purse. I think we’ve got to give at least a nod to that second part of the equation.”

Read more:

• Harrogate council proposes 1.99% council tax rise in final ever budget
• In depth: Why Harrogate district residents can expect council tax rises

He said the proposed rise would enable the authority to be in the best possible shape ahead of the local government reorganisation transition to a unitary council while recognising the drain on the taxpayer.

The meeting heard sharp rises in demand for services such as children’s social care and increases in costs of providing adult social care had left the council’s finance bosses grappling with a decision over whether to “raid the reserves” or increase taxes to limit its deficit.

The executive heard while freezing council tax would be “simply irresponsible”, setting a 2.99% rise would not be in the best interests of residents or the incoming unitary authority.

However, the meeting heard claims from councillors that the authority’s recent past had seen it make a number of politically difficult decisions, putting the interests of residents in the medium term above popularity.

North Yorkshire County Council could dip into its reserves to balance its books in the next financial year.

Ahead of a budget meeting next week, senior county councillors have warned that the council may have to use up to £11 million of its reserves — despite hiking council tax rate.

The authority currently has £271 million in reserves, much of which is earmarked for capital projects and other costs, such as £31 million to fund the transition to the upcoming new unitary authority North Yorkshire Council.

Cllr Carl Les, leader of the county council, said the authority still faced risks over the ongoing impact of covid and social care.

He said:

“We are facing an unprecedented range of risks – the continuing impact of covid, harsh winters and climate change, the need for interventions to prop up social care, the escalating costs of transport for special educational needs students, to name but a few.

“These pressures are such that given the need to continue to deliver key services at a time of rising demand and the need to successfully transition to a new council, our final budget will require a higher degree of support from reserves than would otherwise be the case or is desirable.”

County councillors will meet next week to decide whether to support proposals for its budget for 2022/23.

Read more:

• North Yorkshire County Council waves red flag over finances
• What will devolution mean for major council projects in Harrogate?
• In depth: Why Harrogate district residents can expect council tax rises

Among the plans will be an increase in council tax. The county council has the power to hike its rate by as much as 4.5%.

Depending on the level of council tax set, the county council will have to use between £6 million and £11 million of its reserves.

The authority has also warned it will still face a black hole of at least £30 million in three years, even if it levies the maximum permitted council tax rise this year.

Cllr Gareth Dadd, deputy leader and executive member for finance, said: 

“These continue to be turbulent times. We are responding to increased pressures that the pandemic has placed on our communities and the county’s economy.

“At the same time, long-term challenges grow, for example the massive pressures in social care. This means we face further tough choices as we budget for the future.”

Harrogate district residents should brace themselves for another increase in their council tax bills this year.

As local authorities begin to unveil their budget plans, a hike in rates is one of the measures they will take.

Council tax bills are made by adding up the precepts charged by North Yorkshire County Council, Harrogate Borough Council, North Yorkshire Police, Fire and Crime Commissioner and parish councils.

Harrogate Borough Council has already announced a proposed £5 increase and North Yorkshire Police, Fire and Crime Commissioner has suggested bills could go up as far as £10 for the police force.

A closer look at the detail gives a glimpse into why those authorities are hiking rates.

How much will my bill go up by?

So far, the only authority which has shown its full hand on council tax is Harrogate Borough Council.

Senior councillors at Harrogate council have backed a £5 increase – which would amount to £255.92 for a band D property.

A final decision on the increase will be made in February.

North Yorkshire County Council and North Yorkshire Police, Fire and Crime Commissioner have yet to confirm their proposals — but have suggested what the rate could be.

North Yorkshire’s police commissioner gave a North Yorkshire Police, Fire and Crime Panel a presentation on Thursday which outlined a budget based on a £10 increase.

• Council warns of ‘enormous financial pressures’ despite government funding
• Harrogate council bosses warn tax rise needed to balance books
• ‘God help us!’ — fears over need for £31m to fund North Yorks fire service

This would see the police precept on council tax bills increase to £281.06 and give the force an additional £3 million in income.

However, the fire service will only be able to hike its share by 1.99%. This would see the rate charged for fire services rise to £1.46 per week.

North Yorkshire County Council, which makes up the majority of residents’ council tax bills, has yet to suggest an increase.

But it does have the power to hike its share by as much as 4.5%.

Should senior county councillors support such an increase, this would see its share rise from £1,411 for a band D property to £1,474.

Why is my bill going up?

Nearly two years of covid and more than a decade of government cuts has had a drastic affect on local authority finances.

Coronavirus has left both North Yorkshire County Council and Harrogate Borough Council with financial blackholes to fill.

Last month, Cllr Carl Les, leader of the county council, warned that the authority will have to find £19 million in savings this coming year.

Cllr Carl Les, leader of North Yorkshire County Council. Picture: North Yorkshire County Council.

A government settlement of £26 million will not be enough for the authority to balance its books in 2022/23.

However, Cllr Les did acknowledge that the council tax system needed to be reformed.

He said:

“We continue to feel that residents in North Yorkshire pay too much council tax, particularly in comparison to London, and urge the government to press on with funding reform to create a fairer solution for rural counties.”

Similarly, Paul Foster, head of finance at Harrogate Borough Council, told senior councillors that its finances were not expected to reach pre-pandemic levels until at least 2023/24.

He said the council was predicting a reduction in income for the next financial year of £150,000.

Mr Foster also said government grant allocations had been reduced by £8.2 million since 2010 and that the council would have to dip into its reserves to fund some major projects.

Michael Porter, director of finance at North Yorkshire Police, Fire and Crime Commissioner’s office, setting out the bleak financial picture for the fire service earlier this week.

Fire service hit hardest

But perhaps the authority feeling the affects of both covid and cuts most acutely is North Yorkshire Fire and Rescue.

On Thursday, the Stray Ferret reported that the service has had its capital grant abolished by the government, which means it could have to borrow up to £31 million to fund upkeep of stations and fire kit for crews.

In addition to this, the service is currently running a deficit of £1 million and cannot increase its share of council tax by more than 1.99%.

North Yorkshire Police, Fire and Crime Commissioner, Zoe Metcalfe, described the precept cap set by government as “very unfair” and pledged to continue lobbying ministers for fairer funding.

To illustrate just how bleak the financial situation is, Martin Walker, a former judge and co-opted member of North Yorkshire Police, Fire and Crime Panel, said he was “horrified” by it.

He told Michael Porter, director of finance at the commissioner’s office, on Thursday:

“I have to say that I’m horrified, if that’s not too strong a word, about where the fire service is going to be.

“It’s in desperate need of capital injection and renewing stations, renewing fire engines and renewing all sorts of infrastructure.

“You’re talking about borrowing and having to borrow £30 million. I hesitate to say this, but god help us. 

“The fire service is fighting so hard to provide the service that the public need and yet you’re telling us as a panel that it’s going to get worse, then it will get worse and after that it will get worse.”

What happens now?

Council officials, including the county council and commissioner’s office, will set out their plans for council tax this month.

After that, councillors will vote on the proposals.

All of the public bodies which set council tax rates will confirm their budgets in February.

From there, residents across the Harrogate district will receive their bill for the next financial year in April. The only certainty is that they will go up again.

New housing developments in Ripon have enabled the parish precept charged to council tax payers in the city to be frozen for the second successive year.

The parish precept is charged on top of the tax paid to North Yorkshire County Council, Harrogate Borough Council and the North Yorkshire Police, Fire and Crime Commissioner.

It means residents living in a Band D property will pay a parish precept of £71.89 for the year. People in Bands A to C properties will pay less and those in Bands E to H will pay more.

At last night’s meeting of Ripon City Council, the draft budget for 2022-2023 was unanimously approved after independent council leader Andrew Williams told members:

“Because of the increased number of new houses built in Ripon, we are able to raise a levy of £410,902, at no extra cost to the charge payer.”

Hugh Ripley Hall

The figure represents a 3% increase for the parish council budget, which stood at £400,000 last year and Cllr Williams explained:

“As we are collecting from a larger base, we are able to freeze the precept for the second year running.

“We believe that this is the right and proper thing to do, at a time when families are under greater financial pressure through increased fuel and other costs.”

The bulk of the money will be spent on the queen’s platinum jubilee celebration in June, other public and civic events during the year and items including town hall rent and the management and upkeep of Hugh Ripley Hall and Ripon’s team of hornblowers.

Conservative councillor Mike Chambers, who represents Ripon at city, district and county council level, said:

“I am delighted that there will be no increase in the parish precept and I lend it my support.”

Read More:

• Ripon wants its assets back
• Death of Ripon businessman

A 1.99% tax rise has been backed by Harrogate Borough Council’s cabinet after officials warned some of the authority’s key income streams won’t return to pre-pandemic levels until at least 2023.

Paul Foster, head of finance at the council, told a meeting last night that the rise equates to an extra £5 per household per year and was needed as the authority is still feeling the effects of covid and decades of government funding cuts.

If the proposed increase gets final approval in February, contributions to the borough council for the average Band D property will rise to £255.92.

Mr Foster said last night: 

“Given the impacts of the pandemic, we are provisionally forecasting a budgeted reduction in income of £150,000 in 2022/23.

“And income is not forecast to reach pre-pandemic levels until 2023/24 in the areas of commercial property, planning fees and Harrogate Convention Centre lettings.”

Mr Foster also said government grant allocations had been reduced by £8.2m since 2010 and that the council would have to use reserves cash to fund some major projects.

These include plans to accelerate a redevelopment of Harrogate Convention Centre, as well as carbon reduction works at the venue and other council-owned buildings.

Mr Foster said: 

“Overall, in order to produce a balanced budget, a net transfer from the budget transition fund of £142,000 is required.

“And finally, a thorough review of reserves has identified that just short of £4.5m can be repurposed, with a recommendation that £2.8m is set aside to fund the acceleration of works at the convention centre, and just short of £1.7m is set aside to support our carbon reduction strategy.”

The tax rise has been proposed as part of the council’s final ever budget before it is abolished and replaced with a new North Yorkshire-wide authority which will take over control of all services from April 2023.

• Harrogate council proposes 1.99% council tax rise in final ever budget
• Convention centre forecasts £510,000 profit ahead of decision on major redevelopment

This will mark the biggest changes to local government in the area for almost 50 years, with elections to the new council set to take place in May 2022.

Currently, the borough council makes up just under 13% of council tax bills, while North Yorkshire County Council makes up 70% and police and fire services the remainder.

Speaking at last night’s meeting, Cllr Graham Swift, deputy leader and cabinet member for resources, enterprise and economic development at the council, said the authority’s council tax contributions represented “incredible value” and would help keep key services and projects running.

He said: 

“For £255 we not only empty the bins and provide local cleaning services, but also look after parks, gardens, leisure facilities, and health and homeless charity programmes.

“On top of that, we are still able to invest in meaningful activities that improve the district and lives of residents.”

Taxpayers are set to be hit with another rise in council tax after Harrogate Borough Council revealed plans for a 1.99% rate increase in its final budget before the authority is abolished.

Officials say the rise – which equates to an extra £5 per Band D household per year – is needed in order to balance the books as the council continues to face financial challenges due to pandemic pressures and more than a decade of government cuts.

Paul Foster, head of finance at the council, said in a report that while the authority’s grant allocations had been reduced by £8.2 million since 2010, it had continued to prioritise key services including bin collections and planning.

He said:

“During a period of significant funding reductions, as the government continued to rein in the national deficit, and as other councils across the country faced uncertain futures, Harrogate has continued to maintain its valued frontline services.

“This is a testament to the council’s strong record of financial management before and during the age of austerity.

“In addition to this, the council has been faced with an unprecedented financial detriment as a result of the covid-19 pandemic.

“The resultant economic downturn continues to impact on the council’s finances, with commercial property income, planning fee income and the convention centre lettings income, now not forecast to reach pre-pandemic levels until 2023/24.”

Under government rules, 1.99% is the maximum amount the authority can raise council tax by from April without a local referendum.

The proposed increase will be debated at several meetings before a vote from councillors in February. If approved, contributions for the average Band D property will rise to £255.92.

Harrogate Borough Council makes up just under 13% of council tax bills, while North Yorkshire County Council makes up 70% and police and fire services the remainder.

After rises were agreed last year, average bills in the Harrogate district rose above £2,000 for the first time.

• Campaigners vow to fight on to save Kirkby Malzeard pub
• Car ploughs into Masham Bridge and almost ends up in river

North Yorkshire County Council is currently consulting with the public about its council tax and social care precept levels for next year.

Cllr Carl Les, leader of the county council, said:

“Putting up council tax is never an easy option for this authority. We have always striven to be moderate in our increases.

“In considering the level of council tax, we must understand and balance the hardship families are currently facing and the added pressure a council tax increase may bring with the need to fund essential services to support the most vulnerable in our communities through this critical period.

“We continue to feel that residents in North Yorkshire pay too much council tax, particularly in comparison to London, and urge the government to press on with funding reform to create a fairer solution for rural counties.”

The coming year will be the county council and Harrogate Borough Council’s last before the merger of all North Yorkshire councils into one new authority which will take over control of all services from April 2023.

It will mark the biggest changes to local government in the area for almost 50 years, with elections to the new council set to take place in May 2022.

Cllr Les added:

“We are currently developing our council plan and budget and encourage residents to have their say on our budget, ambitions and priorities.”

To have your say go to the North Yorkshire County Council website here.

North Yorkshire County Council officials have warned that it faces “enormous financial pressures” despite receiving £10 million in additional funding from government.

The Department for Levelling Up, Housing and Communities, announced that the authority will be granted £26 million in grants for the coming year.

Council officials said the funding was more than forecast due to an increase in funding from the government.

The fund includes core spending grants and funding for adult social care.

However, county council bosses have warned that the authority will still have to find £19 million in savings.

The funding includes:

• £1.6 million for new homes bonus
• £20 million social care grant
• £4.7 million for core spending

Ministers said the settlement reflected the extra pressures on local councils, particularly in social care and the covid pandemic.

But Cllr Gareth Dadd, executive county councillor for finance, said the money would already be “accounted for” at this “turbulent time”.

He said:

“The additional money is very welcome. However, this continues to be a turbulent time. We remain in the midst of the pandemic and are responding to the increased pressures this puts on the county’s communities and economy, as well as our own resources.

“At the same time, long-term challenges continue to grow, as we deal with massive pressures in the social care markets and unprecedented levels of inflation and national insurance contributions. This means that as welcome as the extra money is, it is already more than accounted for.”

The move comes as the county council is consulting residents in North Yorkshire on its upcoming budget.

The authority will have the means to be able to hike council tax by up to 4.5% this year, under government rules.

Those in a band D property in North Yorkshire currently pay £1,411.05 in the county council’s share of council tax.

Read more:

• £1.5m spent on unapproved plans for Harrogate Convention Centre redevelopment
• County council leader reveals he was held hostage by distressed constituent

Cllr Carl Les, leader of the council, said reform was needed on funding for rural authorities as residents “already pay too much council tax”.

He said:

“Putting up council tax is never an easy option for this authority. We have always striven to be moderate in our increases.

“In considering the level of council tax, we must understand and balance the hardship families are currently facing and the added pressure a council tax increase may bring with the need to fund essential services to support the most vulnerable in our communities through this critical period.

“We continue to feel that residents in North Yorkshire pay too much council tax, particularly in comparison to London, and urge the Government to press on with funding reform to create a fairer solution for rural counties.”

The county council is expected to outline its budget plan, including council tax, in the new year.

Harrogate Borough Council has predicted that covid will wipe millions of pounds off its finances this year despite the hopeful end of all lockdown restrictions.

Finance bosses at the authority have forecast income losses of around £6.5million from areas including Harrogate Convention Centre, leisure centres and planning in 2021/22 after what they described as an already “incredibly challenging” year during the first 12 months of the pandemic.

Speaking at a meeting on Wednesday, Paul Foster, head of finance, said out-turning on budget in February was an “incredible achievement” and that the council would now need to generate around £18.8million in income to do the same this financial term.

He said: 

“I can report that in line with monitoring through the year, we will out-turn on budget. This is despite a net cost of circa £10million that the council faced last financial year as a result of the pandemic.

“To out-turn on budget is an incredible achievement, particularly as we have managed to maintain performance in a number of critical areas – and this is in addition to the council’s response to the coronavirus pandemic itself.

“Key to achieving a balanced budget in 2021/22 is income recovery. We have budgeted for ongoing income losses of £6.5million as a result of covid, but income generation of £18.8million is still required to balance the budget.

“There is a lot to play this year to see how successful we are in keeping to budget.”

Council budgets across the UK have been stretched for some time as a result of years of government cuts, but for many covid has only compounded the problem.

At a time when local authorities have had to spend more on supporting their communities, income streams have been hit hard with little cash coming in and a lot going out.

Some councils have struggled to carry out statutory duties, been at risk of bankruptcy and have had to ask the government to borrow emergency money in order to keep services running.

Read more:

• Harrogate council to bypass procurement process for £125,000 contract
• No final decision on HCC investment until 2022, says council

In Harrogate, the situation has not been quite as alarming but serious all the same.

At the start of the pandemic, the council scaled back spending to essential areas only before introducing a recruitment freeze and shedding around 60 jobs.

The council has also redeployed many staff into under pressure areas such as bin collections and business support grants, with chief executive Wallace Sampson himself lending a hand to waste collection crews.

The authority has received around £7.8million in emergency government grants, but this has still meant £2.7million of reserve cash has had to be used in to plug funding gaps.

Meanwhile, North Yorkshire County Council – which looks after the vast majority of services including social care, education and highways – is facing a much starker picture with a projected funding shortfall of £59million over the next three years.

Speaking at Wednesday’s meeting, Mr Foster said detailed reports of how Harrogate Borough Council is plotting its way out of the financial pressures of the pandemic will be brought to a cabinet meeting later this month.

He said:

“This report will be finalised this week and published next.

“The out-turn position reflects the support across the council in adhering to the spending controls we put in place, including the recruitment freeze, in response to the financial challenges of the pandemic.

“The delivered savings would not have been achieved without a successful staff redeployment scheme. However, as we move towards business as usual, it is clear that the vacancy freeze is not sustainable and the filling of essential posts is key to our continued success.”

Harrogate Borough Council has written off more than £632,000 in unpaid council tax and business rates bills which stretch back almost a decade.

The debts – some of which stretch back to 1993 – were owed for a variety of reasons including taxpayers being untraceable, dead or in prison, and businesses going bust.

Matthew Waite-Wright, revenues and income manager at the council, told a cabinet meeting on Wednesday all attempts to recover the cash had been exhausted and that the amount written off was “minute” in comparison to the £237 million total collections this year.

He said:

“These write-offs are for last year’s debts but also for preceding debts going to back to 1993. Each individual debt has been investigated fully and considered by at least two officers before the decision to write off has been made.

“We would stress that the figure of £632,000, whilst of course is a large number, is minute in comparison to the actual billings at the moment.”

Read more:

• Harrogate council threatens vicar with criminal charges in planning row
• Decision to proceed with £7.9 million Station Gateway sparks anger

Harrogate council is not only responsible for collecting its own council tax and business rates charges but also those for North Yorkshire County Council and police and fire services. All figures mentioned also include these public organisations.

A breakdown of the debts written off show almost £339,000 was unpaid council tax bills and around £285,000 was unpaid business rates.

The most common reasons for outstanding payments were old debts which were “unreasonable to chase” and business insolvency. Other reasons included incorrect bills being issued, debtors moving abroad and ill health.

Mr Waite-Wright said in a report that writing off debts is good accountancy practice and would not impact on the council’s spending plans.

He said:

“The council has adequate bad debt provision, and there is no impact on the 2020/21 revenue budget. Identification of bad debt and taking decisions on irrecoverable debt is considered good financial management to ensure the council is utilising its resources effectively.

“The amounts now recommended to be written off are a creditably small percentage of the annual collectable debit.

“The actual collection rate remains high at around 97% for council tax but has fallen to around 92% for non-domestic rates in 2020/21 due to covid.

“However, this has not yet affected the level of write offs but an increase is anticipated in future years.”

Earlier this week Harrogate Borough Council apologised for wrongly sending letters to residents threatening them with court action for not paying council tax after incorrectly billing them in May this year. 

Harrogate Borough Council has apologised for wrongly sending letters to residents threatening them with court action for not paying council tax.

A Harrogate resident, who asked not to be named, alerted the Stray Ferret to the council letter dated May 21.

The letter asked for three months of council tax instalments and threatened a court summons, plus costs, if payment wasn’t received by Friday this week.

However, only two months of council tax, April and May, were due by that date, which meant the demand for June’s payment was made prematurely.

The source claimed the local authority’s council tax department had been “overrun with angry council taxpayers” who had received similar letters.

He described the episode as “an administrative cock-up”, adding:

“At a time when many people are struggling financially and being faced with a council tax increase above the rate of inflation, I wonder why Harrogate Borough Council didn’t check their facts more carefully before acting in such a heavy-handed way?

“Even if the figures were correct in the first place they should be showing more consideration towards people and trying to help rather than intimidate them.”

Read more:

• Harrogate council backs council tax hike

• True cost of livestreaming future council meetings revealed

A council spokesman said:

“Unfortunately, residents who receive council tax reminder notices, have this month been issued with the wrong payment figure. It incorrectly included the June instalment figure as well as May.

“Anyone who received this reminder notice will receive a replacement notice in the next couple of days. We’d like to apologise for any confusion or inconvenience this has caused.”

The Stray Ferret has asked how many people received the demand for June’s payment but the council has so far declined to reveal the information.