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North Yorkshire County Council welcomes final Government funding settlement

11 February 2016

North Yorkshire County Council final Government funding settlement provides an additional £15m over the next two years as transitional relief, reducing the level of cuts in government grants as announced in the initial funding settlement just before Christmas.

The settlement means that the county council will now receive a reduction in grants of £13.6m in 2016/17 and a further £25.7m in 2017/18 – a position that is better by £9m and £6m respectively when compared to the draft settlement.

This will help to ease the short-term management of the still considerable savings the county council is required to make in the long-term.

The longer term position remains largely unchanged with the County Council having to save a further £50 million from its revenue budget by 2019/20. This includes plans for £36m and a savings gap of £14m remains.
Government is providing the additional funding in two parts – a discrete ‘Transitional Relief’ payment and the Rural Services Delivery Grant which recognises the extra costs of delivering services in rural areas.
Greg Clark, the Communities Secretary, stated during this weeks final Local Government Funding Settlement announcement that he appreciated the case made by North Yorkshire’s MPs, and council leader Carl Les in particular, for additional funding for rural councils who were losing out to metropolitan areas.

Cllr Les said:

We welcome yesterday’s funding announcement which shows that the Government has listened to our case.

In particular we would like to thank our county’s MPs who have helped to champion the cause of rural councils and the need to create a fair settlement between urban and rural areas.

We pay tribute to the Communities Secretary for taking on board our concerns and for providing a final settlement which provides short-term relief to help us to manage the considerable financial challenges we still must face in the longer term.

The County Council had made urgent representations to Government during the consultation period about seeming unfairness in the local authority funding settlement announced before Christmas. The settlement had required the council to make bigger than anticipated savings, sooner than expected.
Money had been redistributed from counties to metropolitan areas so that counties like North Yorkshire had seen a much bigger reduction in funding while metropolitan districts and inner London boroughs had seen smaller reductions than anticipated.
This change came without warning following the Government’s decision to redistribute funds according to authorities’ ability to raise funds from council tax. It left the County Council facing an additional £11m in savings in the coming financial year and a further £9m more than anticipated in 2017/18.

Cllr Les added:

We still have challenging savings to find, but yesterday’s final settlement has given us the transitional relief needed to make a more considered and strategic approach to further savings.

We are proud of the way we have approached austerity so far and taken a creative, problem-solving approach to service delivery.

Over five years, we have already delivered £116m in savings, the majority of this without impacting upon frontline services.

We can now carry on with this programme in the measured way and avoid knee-jerk decisions.

The Government has permitted local authorities to raise an additional two per cent in council tax this year specifically to protect adult social care services. However, even if it introduces a 3.99 per cent increase in council tax, the County Council needs to make savings of a further £50.3m by 2019/20 on top of the £116m made between 2011/12 and 2015/16, giving a total of £166.3m over the decade. This represents a reduction of about 33 per cent in the council’s spending power. Smaller council tax increases would mean bigger savings had to be found.
Councillors will consider their council tax decision for the coming year on 24 February 2016 – one week later than planned to take into account the Government’s final settlement announcement this week.

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