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Council faces £21m grant shortfall next year due to funding settlement

North Yorkshire County Council is faced with a cut in government grant next year of £21m which is £10m higher than was expected as a result of the Government’s tough funding settlement for local authorities.

The settlement has led to a doubling of the sooner-than-expected reduction in grant with only three months to go. It means for North Yorkshire that out of 38 shire counties, the county has received the fifth worse settlement in the country. It also sees the total elimination of government grant for the County by 2019/20.


County Councillor Carl Les, North Yorkshire’s Leader
County Councillor Carl Les, North Yorkshire’s Leader


While the county council welcomes the introduction of a four-year rather than a one year settlement, the funding will still leave the council with an immediate and pressing shortfall. It also welcomes the increase in the Rural Services Delivery Grant for those councils who face higher costs in delivery due to rurality but this funding is ‘back-loaded’ into the latter years of the current Parliament and is well short of other grant cuts.


County Councillor Carl Les, North Yorkshire’s Leader said:

While this settlement provides local authorities with some benefits, these benefits will come later and we do not as yet have the detail.
Unfortunately this settlement leaves us with the immediate challenge of making more savings than expected in the short term – a very tough challenge indeed.

We welcome the four-year settlement and the opportunity this gives for more secure financial planning in the immediate term, and we welcome the increase in the Rural Services Delivery Grant, but there is no getting away from the fact that we face immediate cuts while any benefits will come down the line.


While most counties will see overall spending reductions of 30 per cent through to 2020, for North Yorkshire this amounts to 36 per cent, compared to 21 per cent for metropolitan districts and 19 per cent for inner London authorities.


County Councillor Carl Les, North Yorkshire’s Leader:

The Government has redistributed funding according to authorities’ ability to raise funding from council tax.

There is no doubt therefore that this is a very hard call for us as it is for other shire authorities


The county council had predicted that savings of £53m would be required up to 2020 but this has now increased to £57m and plans will need to be made to find, as yet, unidentified savings of over £18m. There is an immediate problem of having to find an extra £10m of savings for 2015/16 with only three months to go.


County Councillor Carl Les, North Yorkshire’s Leader said:

The Government is pressing councils to use their reserves to support the savings they must make.

And thankfully due to our prudence we have reserves to draw on. Although these reserves are there for emergency spending for crises like flooding and other effects of extreme weather, we may have to consider using them to buy the council time and for the Cabinet and members to agree a sustainable and coherent strategy for reducing medium term spending.


The County Council will also have to make decisions about raising council tax, for without tax revenue the £18m savings could rise to £60m.

North Yorkshire had appealed to the Government ahead of the review to protect social care  spending. While the county welcomes the Chancellor’s announcement that councils can choose to levy a social care precept of two per cent on council tax, this receipt will be dwarfed by the Government’s introduction of the national living wage.

The county council says it also welcomes increased funding of an estimated £11m for the Better Care Fund which enables health and social care to work together more effectively. However, in the past the Better Care Fund has not materialised fully in the county council’s finances and it is not due until 2018/19 and 2019/20.

The county council say it is making every attempt to protect frontline services through its pioneering 2020 North Yorkshire change programme. Since 2011, the county council has implemented and made plans for total cuts in its spending of around £170m. A programme of savings totalling more than £90m has been completed so far, ahead of schedule. These savings have been brought about largely through back office rationalisation,


Cllr Les added:

We are proud of the way we have embraced change and taken a creative, problem-solving approach to service delivery.

But continuing austerity, underlined by these latest announcements, very severely reduces our room for manoeuvre to protect the front line.


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