North Yorkshire Council Launches Legal Action Over £20m Road Funding Dispute

North Yorkshire Council has initiated legal proceedings against the York and North Yorkshire Combined Authority over a budget decision that leaders claim will cost the county £20 million in road repair funding.

North Yorkshire Council has launched formal legal action against the York and North Yorkshire Combined Authority over a contentious budget decision. Council chiefs argue that the move will result in a substantial £20 million loss in funding designated for vital road repairs across the county.

Leaders of the unitary authority are actively seeking a judicial review following the Combined Authority's decision to agree upon the budget for the Transport Capital Programme spanning from 2026 to 2030. This budget was approved without the backing of North Yorkshire Council's leadership.

The divisive budget plan received support from the Mayor of York and North Yorkshire, David Skaith, alongside chiefs from the City of York Council. However, it faced strong opposition from North Yorkshire Council leader Carl Les and deputy leader Gareth Dadd, both of whom voted against the proposals.

The primary source of dissatisfaction for North Yorkshire leaders stems from additional government funding which they claim has been top-sliced by the mayor to finance alternative transport schemes. Furthermore, they have voiced strong opposition to an alteration in the way road maintenance funding is calculated. According to the council, this specific change means that £4 million of their allocated funds will be diverted directly to the City of York Council.

The legal challenge was formally initiated through a letter before action sent by North Yorkshire Council's assistant chief executive, Barry Khan. In the correspondence, the council asserts that clear legal errors were made when the decision was finalised on the 27th of March, rendering the outcome unlawful. The council notes that the letter was not sent lightly.

Mr Khan outlined the council's position and their hopes for a resolution in the letter. He wrote:

"It is important for CA that the issues contained in this letter are taken seriously and also assists in setting how the partner organisations work in the future. It is hoped that this can be used to reset relationships and ensure that we can all work collaboratively for our residents in the future.

This letter is therefore sent – urgently – expressly as a transparent attempt to alert the CA to the clear legal errors that occurred and provide the opportunity for them to be corrected by the suspended implementation of the decision and the re-taking of the decision in a lawful manner.

This will avoid the worst case scenario – for all parties – of a judicial review being brought with the associated cost, time and poor optics of litigation. The public purse is not best served in taking legal proceedings in this matter if it can be resolved by other means."

The legal argument put forward by the council hinges on the claim that the decision legally required the agreement of Councillor Les, in his capacity as the leader of North Yorkshire Council. Additionally, the authority alleges that the mayor breached the constitution by preventing Councillor Dadd from moving an amendment to the budget proposal during the proceedings.

Councillor Les explained that the authority felt compelled to take action because they viewed the budget decision as prejudicial to the residents of North Yorkshire. He said:

"The basis of setting up the combined authority was that, although it had been led by the mayor, it requires a great deal of consensus to move initiatives or to deliver initiatives. We think this is a budgetary matter and, under the constitution, the budget has to be not only a majority opinion of the authority, but it’s got to be a unanimous decision by the authority, so there are elements in the decision-making that we think are flawed."

The legal challenge has drawn sharp criticism from the Mayor of York and North Yorkshire. Mr Skaith responded to the threat of a judicial review by describing the council's actions as beyond regrettable.

Mr Skaith said:

"It’s a political stunt which could waste thousands and thousands of pounds of taxpayer money. I think the public will see it for what it is, the Tories using public money to fight against getting more investment every year for the next four years. That record investment will now have to be paused. That stings so much because they sat back quietly when the last Conservative government actually did cut their roads funding two years in a row.

I wasn’t elected to carry on the business as usual that has failed communities across North Yorkshire for decades."

In addition to launching the formal legal proceedings, chiefs at North Yorkshire Council have also requested that their authority’s transport, economy, environment and enterprise overview and scrutiny committee conduct a thorough examination of the disputed budget decision.