Numerous community organisations which were told by one council they were set to land significant grants are to be warned they may eventually not receive any of the money.

A meeting of North Yorkshire Council’s executive heard councillors accuse Ryedale District Council, which ceased to exist on March 31, of operating beyond its authority and unfairly raising the expectations of various groups by  launching a scheme to distribute Community Infrastructure Levy (CIL) funds during the local government reorganisation process.

The district council’s leadership had argued as the money was raised through housing developments in Ryedale, and it was “only right that it is spent on projects in Ryedale”, rather than handed to North Yorkshire Council.

In March an overwhelming majority of Ryedale councillors voted in favour of the applications and the authority’s de facto leader Councillor Di Keal underlined how successful applicants to the fund had gone through a very rigorous process to ensure they fitted into strict guidelines for the spending of CIL funds.

Coun Keal said: “It would be wholly wrong of the new council to fail to deliver the grants and pick the pockets of these organisations, including a charity for children with disabilities, several schools and sports clubs, especially after the huge amount of work they have put into applying for the funds and raising match funding.“

Executive members were told Ryedale had invited applications for grants after the Government had introduced a rule on district councils stating they must get permission from North Yorkshire Council for major spending decisions.

“Successful” applicants to Ryedale’s CIL grant fund include Norton School, Kirkham Henry Performing Arts CIC, Malton Town Council Rainbow Lane Pump Track Project, Ryedale Learning Trust Ryedale School, Slingsby Sports and Social Club Slingsby and Ryedale Special Families.

Other projects are Malton Community Sports Centre (Malton School), Helmsley Open Air Swimming Pool Pavilion Rebuild, Ryedale Environment Group Kirkbymoorside Town Council and Pickering Recreation Club.

However, Helmsley councillor George Jabbour told North Yorkshire’s executive that despite newspaper reports highlighting “the facts” some organisations had applied to Ryedale “while incorrectly believing that Ryedale District Council had the authority to award the CIL money”.

He said the organisations had spent “substantial time and resources” without realising their proposals would have to be considered by North Yorkshire Council after March 31 and were now uncertain as to their future funding.

Coun Jabbour told the meeting: “North Yorkshire Council has a duty to consider each decision involving spending taxpayer money according to the priorities and needs of the local community. This is what I expect this council to be meticulously doing with respect to this matter too.

“This may or may not get to the same decision that Ryedale councillors reached. Therefore I do have a great deal of sympathy for the entities which applied to the grant scheme without fully understanding the process, or the timeframe or uncertainty involved.”

Coun Jabbour said all the schemes seeking funding were “excellent”.

The authority’s executive member for finance, Councillor Gareth Dadd said the administration would always consider the “local community” as being “the entire community of North Yorkshire”.

He said the council would assess the details of each application and also meets the authority’s priorities, particularly in the Ryedale area.

Coun Dadd said the council would be writing to each of the applicants to explain the stage the process had reached and when final decisions over the grants would be decided.

The finance boss warned that there were two potential infrastructure schemes – at Welburn Hall School, costing about £5m and at Norton Lodge Primary School, costing £6.5m – for which the CIL money could be needed.

Coun Dadd said the district council should never have begun the process without understanding its collective responsibilities.