How North Yorkshire's new authority aims to plug a £105m budget gap and create a bright new future

The start of April will see the new, bigger North Yorkshire Council take over following the abolition of the seven existing district councils – including Harrogate Borough Council – as part of a devolution deal for the Government to hand back decision-making powers and millions of pounds to the county.

But the new authority will face a tough start - despite being granted an increase of £22 million in additional funding from the Government in the 2023/24 financial year.

North Yorkshire County Council’s leader, Coun Carl Les, who will also be leader of the new authority from April, said: “We are faced with the biggest financial pressures which I have witnessed in all of the time I have been a member of the county council since I was elected more than 20 years ago.

“While the extra funding from the Government is extremely welcome, it will still not be enough to alleviate the extraordinary challenges which we do need to tackle in the coming financial year.

“The pressure on budgets will be felt across all of the directorates which provide key services.

“However, we are committed to ensuring that we can continue to provide the best possible services to the public in the face of these immense financial challenges.”

The scale of the North Yorkshire Council’s operations will see it have an overall spend of about £1.4 billion, including £343 million on schools.

But significant overspends are already being reported in each of the county council’s service directorates.

For instance, the health and adult services directorate is being faced with huge pressure from increased demand, especially for adult social care as well as inflation, and its existing £7.9 million in contingency funding has already been allocated.

The new authority’s first financial year will see an overall budget shortfall of more than £30 million.

That’s despite the Government’s announcement that nearly £18.5 million in grant funding will be given to North Yorkshire to ease the pressures on adult social care services.

As a result of the merger of local authorities, offices and staff, the new council is expected to recoup anything between £30 million and £70 million in its first few years of operation by joining up services and maximising spending power.

Coun Les said: “The chance to operate as one single authority will allow us to make significant savings and protect some of the most important local services at a critical time when everyone and every organisation is feeling the pressure from increased costs.

“There will be tough financial decisions ahead, but by making this change now, we are in a much stronger position to manage the rising costs and increased demand for services.”

The problem is, such are the economic challenges facing North Yorkshire as elsewhere, the new authority’s financial gap is expected to widen.

During the second year of the new county council’s operation, it is estimated that there will be a further shortfall of £30 million, with another annual deficit of £45 million predicted in the third year, leading to a total of £105 million over three years.

North Yorkshire Council says it will cover its first-year gap by dipping into reserves but adds it is vital this is a one-off.

North Yorkshire County Council’s corporate director for strategic resources, Gary Fielding, says the likelihood is that the council will be looking to hit the top end of efficiency savings.

“£105m is the gap which needs to be plugged in the first three years,” said Mr Fielding.

"We do have the reserves at the moment after careful long-term financial planning but they are there to address unexpected situations and to ensure we can deliver on our responsibilities for our residents.

"Getting rid of duplication once we merge all the authorities is the bottom end of the council’s aspirations on savings which is where the £30m figure comes from.

"But pressure will will be there to hit the top end of £70m which requires more thought and involves changing how services are delivered with greater efficiency."

A five-fold increase in energy bills, the dramatic rise in inflation to more than 10 per cent are problems not of North Yorkshire’s making.

The expectation is there will be no reductions in services in the first year, said corporate director for strategic resources Gary Fielding, and that any cuts in future would only even be considered if the search for savings had been exhausted.

But it would be folly to guarantee anything forever when it comes to budgeting, he added.

North Yorkshire grasped the chance for devolution with high hopes and it remains positive about making life better for its residents.

Council leader Carl Les has pledged that the new authority will have the interests of communities at its heart and will aim to be the most local council nationally – despite serving such a vast geographical area.

“The launch of the new council presents a defining moment for North Yorkshire and the way we can deliver services to the public,” said Coun Les.

“We are fortunate to have the opportunities provided by reorganising local democracy and merging the current eight councils into a single organisation."