Council leaders in North Yorkshire pushing forward a move to charge residents the maximum council tax increase say they can see no alternative if key services are to be retained.
North Yorkshire County Council’s executive heard its financial bosses warn of the scale of “unprecedented” challenges ahead, even following the pandemic and ten years of austerity.
Under the proposal for a 4.99 per cent increase in council tax, band D residents will face having to pay an annual £83 extra from April.
Senior figures at the council say due to the potential savings that can be realised from local government reorganisation and the formation of a unitary authority from April, North Yorkshire is in a much better position than many of its counterparts across the country.
Outlining the authority’s budget for the coming year Gary Fielding, the council’s corporate director, said it was facing inheriting £18m of deficits from the district and borough councils and that overall black hole for the 12 months from April would be about £30m.
He told the meeting the council was facing £53m of extra pressures due to pay inflation and energy costs were set to increase by five times over the space of two years.
The executive was told the authority’s leader, Councillor Carl Les, had written to MPs and the government asking for help with energy costs to keep leisure centres open.
Mr Fielding said use of the council’s reserves would give it the opportunity to “buy time” for the authority to work out a savings plan over the coming year.
He told the meeting the authority would “need to use the next 12 months well” to avoid the risk of stringent spending restrictions being imposed on the council.
Councillor Gareth Dadd, the council’s finance executive member, said the council would look to push towards finding £70m of savings over the next year, including by “going hard” on property rationalisation once the district councils were merged with the county council.
He said he was proposing the 4.99 per cent “with a heavy heart” during the cost of living crisis, but that every one per cent of the increase would be equal to £4.1m every year to the council.
He also underlined the proposed rise, which will be considered next month by the full council, was just half the rate of inflation.
Inflationary pressures, including pay awards, previously accounted for an increase of about £19m a year across the eight North Yorkshire councils.
However, the dramatic rise in inflation to more than ten per cent a year has seen £66 million having to be allocated to next year’s proposed budget to cope with the increase. This equates to a rise of about £47m compared to previous years.
Coun Dadd said it was a “very tough balance between the ability to provide services and those who will struggle to afford the rises”, adding: “I can see no alternative to the 4.99 per cent increase.”
Referring to the savings plan, he added: “It is going to be really bumpy, it is going to be really challenging.”
He said the council was prioritising limited funds we have got to those who actually need it and dismissed calls for the council to pump £1m towards 20s Plenty schemes, saying it would mean taking funds from other services.
Leader of the opposition, Councillor Bryn Griffiths, responded saying the authority was “facing some very difficult times indeed” and that he did not envy the council’s position if it faced another financial “hiccup” .