North Yorkshire Council Makes £5m Saving

Switching energy supplier has saved the council cash but finance chiefs warn there is still a £25m deficit.

North Yorkshire Council says it has made a five million pound saving since it came in to beign in April.

However the savings are in part due to a reduction in it's energy bill.

Executive Member for Finance - Councillor Gareth Dadd - says more savings are needed to balance the budget.

Councillor Dadd says the savings are in part a result of the local government reorganisation which took place in April and saw the seven district and borough councils merge with the old county co8ncil to form one new authority.

Switching energy supplier has helped save North Yorkshire Council the bulk of the five million pounds.

The council says it's been able to get a better deal in part because the single authority is bigger than the seven district councils it replaced.

But council director Gary Fielding says it doesn't mean there is cash to spend.

The new council says that major savings have also been achieved by redeploying staff to fill vacancies after North Yorkshire County Council and the previous seven district and borough authorities merged in the biggest shake-up of local government since 1974 to pave the way for a devolution deal.

However, there are significant financial pressures in two of the council’s largest directorates, health and adult services and children and young people’s services.

Both directorates have seen a growing demand for their services, and the provision of care and support for adults, for instance, is predicted to see increased spending of £20.7 million since the end of the last financial year.

The support needed for young adults with multiple disabilities and older people with complex needs linked to dementia has also placed intense pressure on the council’s finances.

There is also a predicted significant shortfall on income within the council’s planning services, with a reduction in the number of applications across the county resulting in a forecast fall in funding of £1.3 million for the current financial year.

Housing services are also witnessing major pressure of finances with a predicted £628,000 overspend in the current financial year. The main cause is the cost of accommodation for homeless people, which is responsible for an estimated £424,000 overspend. Work is being undertaken by the council to reduce future costs.

The multi-million pound deficit in the council’s budget is being covered for the first year through the one-off use of reserves, after some additional savings have also been made. In the longer term, the financial gap is expected to widen and will need to be met by additional savings.

A masterplan is now being pulled together to maximise millions of pounds in savings across North Yorkshire Council to help counter the unprecedented financial challenges. The plan to introduce the savings needs to be set out by February next year to ensure that the new authority does not have to continue to rely on cash reserves to balance its books.

During the second year of the new council’s operation, it is estimated that there will be a further shortfall of £30 million, with another annual deficit of £45 million predicted in the third year. Unless savings can be found, a total of £105 million will be needed to be used from the council’s reserves over the next three years.

The council says the shortfall in it's budget has been caused by a series of factors, such as the high rate of inflation, issues surrounding supply chains and rising staffing costs as well as the aftershock of the Covid-19 pandemic.

However, the opportunity to streamline the way in which key services ranging from waste and recycling to education, highways and planning are delivered to nearly 33,000 businesses and the 615,000 residents in North Yorkshire is seen as essential to helping to tackle the growing demands on the new council’s finances.

By joining up services and maximising spending power, North Yorkshire Council hopes to recoup between £30 million and £70 million, which will become annual savings. The scale of the new council’s operations will see it have an overall spend of about £1.4 billion, including £343 million on schools.

However, opposition leaders on North Yorkshire Council have questioned the councils statement.

Independent group leader Councillor Stuart Parsons said the council’s planning service was “refusing to service”, waste collection changes had been made without any consideration to staff or the public, the highways team was “delaying jobs they are supposed to be carrying out”, and that there was a critical shortage of customer care staff.

He said:

“The money is being saved by not delivering services. Residents are not getting responses to their questions from the council, so they come to me, but I am meeting with the same reticence to say hello. What used to take one or two emails is now taking six or seven.”

Councillor Steve Shaw Wright, leader of the authority’s Labour group, said it had become apparent services would see further cuts,

“with none of the benefits of this great new unitary appearing to make any difference whatsoever”.

He said:

“It is frightening for some people. You almost need to be in the next door to death category to get sort of service. The mild and moderate have gone out of the window and almost the severe are heading that way as well.”

Liberal Democrat group leader Councillor Bryn Griffiths highlighted concerns over the authority’s planning service, adding that getting the council’s management structure changed in a short space of time had proved “difficult” and the authority may have underestimated the amount of work needed to  reassign the workforce.