North Yorkshire Council faces tough financial choices with £40m funding gap
Council warns of challenges ahead
North Yorkshire Council has warned of tough financial decisions as it faces a £40 million funding shortfall, following changes in local government support from Westminster.
It says the governmental funding settlement has drastically reduced the council’s core budget, leaving it with a £20 million loss for the next three years on top of a £22 million shortfall already confronting them this financial year.
Financial strain on rural services
Council leader Cllr Carl Les expressed concern over the financial pressures facing the authority as it works to deliver essential services across England’s largest and most rural county.
“We have petitioned the Government to ensure that we get the fairest possible funding settlement, but we have still been left with a multi-million pound shortfall.
“All councils are facing a tough financial situation, but delivering services across deeply rural areas such as North Yorkshire costs more.
“We have lost nearly £20 million in base funding when compared to last year, and this is significantly higher when inflation is factored in. There will undoubtedly be tough decisions ahead when we come to consider our budget for the next financial year and into the future.”
Council tax impacts
The Government’s settlement assumes council tax increases of 4.99 per cent annually, including a two per cent precept for adult social care, to help cover costs.
Under the proposed budget for 2026/27, this would mean an increase of £96.78 for an average Band D property, bringing the annual bill to £2,036.32.
Public consultation
To engage the public on spending priorities, the council held its largest-ever annual consultation, Let’s Talk Money, late last year.
More than 2,700 residents took part, with 77 per cent expressing support for raising council tax to deliver critical services.
Health and wellbeing (82 per cent), local economy (79 per cent), and education (78 per cent) were rated as the most important council priorities. Essential services like highways, waste, education, and social care account for about 60 per cent of the council’s budget and remain key focus areas.
Continuing challenges
North Yorkshire Council has expressed concern over the challenges posed by rising demand for services, particularly in areas such as adult social care and transportation.
Deputy leader Cllr Gareth Dadd said:
“The headline core spending power figure gives an artificially positive picture of our overall funding. Despite additional national funding for social care, we are facing a net reduction in core government support.”
He added:
“While the Government has said funding is being used to support the most deprived parts of the country, this should not be at the expense of rural areas. Many of our services are led by demand – if people are eligible for a service, then we will provide them with the support they need.”
According to the council, providing services in rural parts of North Yorkshire incurs significantly higher costs. Social care in sparsely populated areas costs £5 more per hour than urban locations, and home-to-school transport expenses are more than triple the average for other English councils due to long distances traveled.