North Yorkshire County Council’s ‘worst fears’ have been realised as they face a £21m cut to the government grant they will receive next year.
In his Autumn Statement, chancellor George Osborne announced that he would be axing central government grants to councils over the next four years.
However, despite already preparing for an anticipated cut to their grants, the county council have announced the shortfall is £10m higher than what they were expecting.
Coun Carl Les, leader of North Yorkshire County Council (NYCC) faces an ‘immediate and pressing shortfall’ and could not guarantee that some important frontline services would avoid being cut.
He said: “It appears that a lot of the extra cuts we are being asked to make are coming at the front of this four year project but the welcome news, such as that of the business rates, will come later and we do not have the detail as of yet.
“This means we have now got to identify where the savings will come by the end of March so that we can implement them by the start of the financial year which will be incredibly difficult.
“Unfortunately we are going to have to make some very unpopular decisions but we do not know what they will be yet. We will have to start looking at the options properly when we return in January.”
Since 2011, the county council has implemented and made plans for total cuts in spending of around £170m through its 202 programme but Coun Les warned the latest announcement will leave them ‘back at square one’.
He said that, out of the 38 shire counties, North Yorkshire has received the fifth worst settlement in the country with a 36 per cent reduction to their overall spending by 2020.
The scale of the cuts means that not only will NYCC be likely to increase council tax by at least two per cent, Coun Les said they would also be looking to implement the optional two per cent in addition to that, to pay for rising social care bills.
He said: “In terms of council tax, that’s a decision that won’t just be made by me alone. There will be a variety of views about that, the model we are going to have to do a study at the beginning of January.
“Inevitably we will be making the two per cent increase to fund social care. Mr Osborne has offered us this solution so it would not make sense if we did not take up this offer.
“We have done what we can where we can but if we don’t increase council tax then we will have to find other ways of saving money.”
Despite greater fundraising powers, Coun Les said NYCC would only be able to raise £5m a year to fund their social care bills from increasing council tax by two per cent.
He said: “North Yorkshire is a place where lots of people like to come and retire so this means that the real pressure is on the care of the elderly. There’s more of them here and they are living longer.”