North Yorkshire council chiefs have blamed “one of the worst funding settlements in the country” for a proposed above inflation council tax rise which is set to cost taxpayers more than £90 extra a year.
North Yorkshire Council is planning to increase its share of the council tax bill by 4.99 per cent for 2025/26 — the maximum allowed without having to hold a referendum.
The increase would mean residents in a Band D property paying an additional £92.18 a year.
Council bosses say the rise is needed after the government funding settlement left a £5m hole in their budget plans.
The Tory-led authority has accused the Labour Government of diverting financial support from rural communities towards towns and cities.
It claims it has been given the fourth worst core funding settlement in the country with only three other rural authorities — Herefordshire, Rutland and Shropshire — getting a worse deal.
North Yorkshire Council’s leader, Councillor Carl Les, said: “All councils across the country are facing immense financial pressures but the funding settlement which we have been handed by the Government will mean that we are faced with an even tougher situation than we had expected.
“We are acutely aware that all of our communities are feeling the impact of the cost of living, and we certainly do not want to compound those pressures.
“However, we are now faced with a council tax rise of 4.99 per cent to help to counter the multi-million-pound shortfall which we are facing in the council’s budget for the next financial year.
“If we don’t push ahead with the 4.99 per cent increase, the financial deficit will be even worse.”
The councillor repeated a call for the rural authorities to be given a better deal when it conducts a proposed review of local government funding.
The council says its budgets have been hit hard from the loss of the £14.3m rural services delivery grant, which was given to some authorities in recognition of the challenges of providing services in rural areas, as well as the rising costs of national insurance contributions.
Council chiefs say the £5m financial shortfall has been compounded by the demand for care of older people, working age adults, and children and young people.
The proposed tax rise will be discussed by senior councillors sitting on the authority’s executive committee next Tuesday.
The increase has been announced after York and North Yorkshire mayor David Skaith revealed plans for a rise of almost 30 per cent in the precept for North Yorkshire Fire and Rescue Service, with North Yorkshire Police’s share of the council tax bill set to go up by 4.56 per cent.
In response to the council’s concerns about its settlement, the Ministry of Housing, Communities and Local Government said the rural services delivery grant did not properly account for need, and a large number of predominantly rural councils received nothing from it.
A spokesperon added: “We are injecting £69bn of funding into council budgets across England to help them drive forward the government’s Plan for Change, including a £23m increase for North Yorkshire Council.
“We know that councils have suffered from short-term solutions, which is why we are working hand in hand with councils to reform this outdated system and fix the foundations.”
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