A NORTH Yorkshire council which is set to lose £34.5 million in funding over the next two years has said Government claims over how its spending power will be affected look “extremely misleading”.
North Yorkshire County Council's provisional Government settlement for 2014/15 will be £14.4 million less than this year and it is predicted to lose another £20.1 million in 2015/16. It could lead to the authority raising council tax bills for the first time since 2010.
The financial situation will be outlined to the council’s executive tomorrow as it faces cutting £77 million between 2015 and 2019. This is on top of £94 million of savings being made between 2011 and 2015.
In a report, its corporate director for strategic resources, Gary Fielding, said the Government had suggested the amount the authority would be able to spend next year would drop by just 1.3 per cent, despite its funding being reduced by 8.8 per cent, and will actually rise the year after.
Spending power covers a council’s entire resources, not just its Government grant, but Mr Fielding’s report said the Whitehall calculation masked the true extent of central funding cuts because it included locally-collected council tax and extra funding which is purely for health.
The county council’s financial planning factored in a two per cent council tax rise for 2014/15, when the Government is offering authorities which freeze bills a grant equivalent to one per cent of council tax income. Officials believe taking the grant would leave the council with an extra £2.3 million shortfall, while a two per cent increase would add £21 to Band D bills.
Council leader John Weighell said £171 million of cuts in eight years would mean the authority losing more than a third of its spending power.
He said: “In the four years ending March 2015, frontline services have been protected as much as possible, with just under two-thirds of our savings coming from non-frontline budgets. However, we now face an extremely challenging situation, particularly for 2015/16.”