Council tax could rise nearly 5%, authority warns

The Labour government has given North Yorkshire Council one of the "worst" local authority funding deals in the country, senior Conservative councillors have said.

Council leader Carl Les and deputy Gareth Dadd said ministers were "diverting" cash from rural areas towards towns and cities, meaning a "multi-million pound" budget shortfall in 2025-6.

They spoke as the council prepared to set next year's budget, which includes plans to increase council tax by the maximum 4.99%.

A government spokesperson said: "We're injecting £69bn of funding into council budgets across England to help them drive forward the government's Plan for Change, including a £23m increase for North Yorkshire Council."

North Yorkshire Council received the country's biggest share of what is known as the Rural Services Delivery Grant, a grant designed to support rural councils, which Labour is scrapping.

However, officials said the council got the "fourth worst" core funding settlement in the country - with the other three councils also covering large rural areas in Herefordshire, Rutland and Shropshire.

Core funding is used to pay for services like social care, waste collection and recycling and road repairs.

Les said: "The government has pledged to conduct a review of local government funding.

"I would urge ministers to ensure that there is a fair deal for all local authorities, whether they are responsible for large rural areas such as ourselves or for towns and cities."

Dadd said the council's budget for next year - which, by law, has to be balanced - was currently short by £5m.

He said: "We are faced with some very tough choices to try to balance our books.

"We are due to have to use our financial reserves to cover the deficit which means that once that money is spent, we cannot recoup it."

The council's decision-making executive was due to meet on 21 January to debate next year's budget, with the council tax rise of nearly 5% on the table - including a 2% precept for adult social care.

Les said: "We are acutely aware that all of our communities are feeling the impact of the cost of living, and we certainly do not want to compound those pressures.

"However, we are now faced with a council tax rise of 4.99%.

"If we don't push ahead with the increase, the financial deficit will be even worse."

The Ministry of Housing, Communities and Local Government said the Rural Services Delivery Grant did not properly account for need, and a large number of predominantly rural councils received nothing from it.

A department spokesperson said: "We know councils have suffered from short-term solutions, which is why we are working hand in hand with councils to reform this outdated system and fix the foundations."

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