Prime Minister Rishi Sunak defends council funding amid £40m black hole in North Yorkshire’s budget

Mr Sunak was speaking at Harrogate Bus Company’s headquarters in Starbeck this morning where he met staff from the firm and faced local journalists alongside Harrogate & Knaresborough MP Andrew Jones.

Several councils have issued section 114 notices effectively declaring themselves bankrupt with other councils in Yorkshire including Kirklees and Bradford in a precarious position.

Senior councillors at North Yorkshire Council, which was created out of the ashes of the seven former district councils plus the county council, have insisted the authority is not at risk of going bankrupt.

But it is facing pressures on several fronts and is forking out huge sums of money on adult social care and special educational needs provision. It has also seen energy costs skyrocket across its vast estate since the covid pandemic and war in Ukraine.

This month the goverment agreed to hand councils across the country £64billion over the next financial year, which is an increase of 7.5 per cent.

However, the Conservative-run North Yorkshire Council is still facing a deficit of £41.6m, which is the amount of money it needs to continue to run services at their current level.

Mr Sunak, who is also MP for Richmond, was asked by the LDRS if he has concerns about the authority’s finances.

He said: “We’ve just concluded the local government finance settlement and put an extra £600m into local government and across the north, councils have about 7.5 per cent more money to invest in local services this year than last year. That gives you a sense of the scale of the increase.

“Rural areas like North Yorkshire also get specific money because of the difficulty in delivering services. On top of that, the government is investing in local communities whether that’s in transport or levelling up, so they are getting direct investment.”

Mr Sunak fielded several questions related to transport and he praised the £2 bus fare cap which he said has resulted in a 50 per cent increase in the number of passengers using buses in Harrogate.

He also said the recently announced business rates relief will help under-pressure small businesses in Harrogate.

He added: “Small businesses are the lifeblood of our economy and there are fantastic ones across Harrogate and North Yorkshire.

“Their number one concern is business rates and coming into this year there will be a 75 per cent reduction for a typical bill.

"We want vibrant high streets and our business rates tax cut will make a meaningful difference to them.”