North Yorkshire Council's executive has backed a 4.99% increase in council tax for the upcoming year.
It's the maximum permitted increase without triggering a local referendum. This decision comes amidst a backdrop of significant financial challenges, which leaders say stems from the loss of a crucial rural services delivery grant.
Finance chief Councillor Gareth Dadd has strongly criticised the government's decision to eliminate the £14.3 million rural services delivery grant, describing it as "Rayner's rural robbery". He argues that the move, coupled with increases in employer National Insurance contributions, will cost the council in excess of £21 million.
Councillor Dadd believes the government's actions are politically motivated adding that "one could be forgiven for believing their motives are vindictive". He says the council is exploring legal options, including judicial review, to protect its position.
Despite the funding setbacks, the council has undertaken significant cost-saving measures. It has already achieved efficiencies and savings of £34 million for the next year, and says it has a planned accumulated sum of £63 million by 2027/28.
Councillor Dadd says A large portion of these savings – about two-thirds or circa £90 million – have resulted from the local government reorganisation (LGR), which merged district councils with the county council.
The council says the savings have resulted from structural opportunities delivered by unitarisation, including a single operating model and customer strategy, and using data and digital capabilities to become more efficient.
Council leader Carl Les acknowledged the difficult financial position, stating, "We're not in a happy place," but added that the LGR has been a "lifesaver".
Councillor Simon Myers emphasised the necessity of the council tax increase to maintain essential services and ensure the authority remains solvent, noting that the government relies on the council to raise the tax to pay the bills. He regrets that residents are being asked to pay more.
The council's medium-term financial strategy indicates that despite savings, there will be a need to use £57.2m of reserves if no new savings were brought forward. The budget for 2025/26 requires a contribution from reserves of £4.9m which increases further to £34.4m by 2027/28.
The council is forecasting to hold £180.8m in a Strategic Capacity Reserve at 1 April 2025 which reduces to £66.4m by the end of the proposed Medium Term Financial Strategy.
The report also noted that the council is planning to invest £232.1m on capital schemes across the County in 2024/25 and £939.2m in total over the 5 year capital plan period from 2024/25.
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