North Yorkshire County Council (NYCC) is facing a further £21m reduction in its government funding.
The financial settlement from the government announced today (December 18) confirmed that the council will have to make major savings to meet the restraints on the budget, and that a rise in council tax is necessary.
NYCC is currently in the process of making savings of £94m by March 2015, but today’s announcement reaffirms the fact that a further £73m will have to be found over the next four years.
This represents a cut in the council’s spending power of more than a third in eight years.
NYCC executive member for central and financial services Carl Les (Con) said: “The announcement by the government today is just as difficult as we had anticipated.
“It confirms the accuracy of our planning and emphasises the extremely difficult and challenging predicament in which we find ourselves.”
Council members will be asked in February 2015 to approve the 2015/16 budget.
Although no firm decisions have yet been made, the Harrogate Advertiser has learned that its financial strategy is predicated on a rise in council tax of two per cent.
If the council does not increase tax, it will have to find £2.3m in savings in addition to those already planned.
In the last year of the coalition government’s council cuts, NYCC is one of the few councils in the region not losing out beyond what was anticipated, along with York.
The round of spending cuts announced by Communities Secretary Eric Pickles sees councils across Yorkshire cut by at least £96.6m.
In Sheffield alone the budget cut is worth at least £21.5m, with Leeds losing £15m.
Leader of Leeds City Council Coun Keith Wakefield (Lab) said: “It is quite alarming that the core grant funding cut announced today for Leeds is even worse than we feared – 15.8 per cent down from last year when had been expecting 14.9 per cent.
“That is only going to make an incredibly difficult situation even harder and I’m afraid there is no doubt this is now going to affect all areas of the council, including frontline services and undermining vital services for vulnerable people.
“Even using the government’s own measure of ‘spending power’, the cut for Leeds is yet again well above the national average and continues the sadly predictable trend of the north bearing the brunt compared to the south, with some councils there receiving increases which cannot be right.
“National bodies like the National Audit Office, Office of Budget Responsibility and Institute of Fiscal Studies have all warned that this continuing austerity is unsustainable and yet northern councils keep being asked to cut more when at the same time the Whitehall machine continues unchecked. That is simply not fair and serious questions need to be asked why that is.”
The 1.8 per cent cut is lower than in 2014/15 and one of the lowest since the coalition came to power in 2010.
No council will face a loss in spending power of more than 6.4 per cent, it was revealed in the House of Commons.
However, director of the Society of Local Authority Chief Executives and Senior Managers (SOLACE) Graeme McDonald said: “This settlement reminds us that the financial challenge facing local government is immense. Cuts of up to 6.4 per cent will push some authorities to breaking point.
“Government is beginning to recognise that councils have led the way on deficit reduction, but with cuts and demand increasing, fragility is beginning to show.
“The financial future of local services is unsustainable without a more ambitious plan for public service reform.”