Council chiefs say they have no choice but to raise council tax by the maximum allowed after receiving a £43m "wallop" in cuts from the government.
Members of North Yorkshire Council’s executive committee have agreed to recommend a 4.9 per cent increase in the authority’s share of the precept when the full council meets next week.
Deputy leader Gareth Dadd, executive member for finance and resources, said a loss of around £20m in the government funding settlement for 2026/27 followed previous cuts last year.
He said:
“If we take into account the fair funding review, the loss of the rural services grant last year, plus the net cost to this authority from the rise in employers’ National Insurance contributions, we are looking at a £43m wallop.”
Cllr Dadd said the authority would have needed to increase its precept by seven per cent to balance the budget by council tax revenue alone.
Instead, the senior councillor said the shortfall would need to be met by savings and money from the authority’s reserves.
He added:
“You can see immediately the problem that we’re facing. That’s why we’ve got savings programs of £56m over the next three years and why we are recommending the maximum amount of tax increase.
“Each one per cent reduction in that council tax increase would add a further £5m per year to the deficit, so play with that figure at your peril.”
The committee heard the authority was still facing a £17m shortfall 2027/28, which rises to around £25m in 2028/29.
Cllr Dadd said the deficit would be far higher had savings not been made due to local government reorganisation in 2023.
He added:
“Make no mistake, local government reorganisation was financially necessary and it’s avoided this council being in the field of up to 74 councils that are seeking exceptional financial support up and down the country.
Councillor Mark Crane, executive member for open to business, said he did not come into politics to raise council tax, but the authority had no choice this year.
He said:
“I can’t just let it go, the amount of money the government’s taking off of us.
“Sorry, but to lose over £40m in the last couple of years, I do not see how they think we can do anything other than raise council tax by the maximum amount.”
A 4.9 per cent increase in council tax would raise the average Band D council tax by £96.78 per year, or £8.07 per month.
It would result in an overall average Band D level of £2,036.32 for 2026/27 before taking into account other precepts for parish and town councils, and the police and fire service.
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