Taxpayers are being warned they face a 4.99 per cent rise in council tax as North Yorkshire Council piles the pressure on the Government over a new £5 million budget shortfall.

North Yorkshire Council said the council was facing "tough choices” and spelled out why it was the Government’s fault:

The council has been handed one of the worst funding settlements in the country by the Government that has left a £5m deficit in the authority’s new budget.

The loss of the rural services delivery grant from the Government.

North Yorkshire Council’s proposed budget for 2025/26 would see a rise of council tax of 4.99 per cent for all residents in this largely rural county. (Picture contributed)

placeholder image — North Yorkshire Council’s proposed budget for 2025/26 would see a rise of council tax of 4.99 per cent for all residents in this largely rural county. (Picture contributed)

The announcement in the Budget in October last year that the rate that employers pay in National Insurance contributions will rise from 13.8 per cent to 15 per cent on workers’ earnings from April.

As a result, North Yorkshire Council leader Coun Carl Les said, the council’s proposed budget for 2025/26 would see a rise of council tax of 4.99 per cent, including a two per cent precept for adult social care, to counter the financial challenges, equating to an increase of £92.18 per year for an average Band D property to a total bill of £1,939.54.

“All councils across the country are facing immense financial pressures,” he said, “and we are acutely aware that all of our communities are feeling the impact of the cost of living.

"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.”

The North Yorkshire Council executive will consider the next financial year’s proposed budget, which includes plans to introduce a 4.99 per cent rise in council tax to counter the deficit, when members meet on Tuesday next week.

North Yorkshire Council’s deputy leader, Cllr Gareth Dadd, whose responsibilities include the authority’s finances, said: “We are faced with some very tough choices to try to balance our books.

"We are due to have to use our financial reserves to cover the deficit which means that once that money is spent, we cannot recoup it.”

North Yorkshire Council says it has been given the fourth worst core funding settlement in the country - the other three local authorities also cover large rural areas in Herefordshire, Rutland and Shropshire.

But, it adds, the county’s sparsely populated communities heighten the challenges of providing services to the public, as economies of scale are far diminished when compared to more urban areas of the country.

For example, The council spends more than £50 million each year on home to school transport and the policy has had to be revised after costs have more than doubled since 2018/19 when it was last reviewed.

The costs to the authority per pupil for home to school transport is more than three times as high as the average for other English councils due to vast rural areas of the county and the distances travelled.

Each hour of social care in North Yorkshire’s rural communities can cost £5 more than in other parts of the country because of the travel costs and the longer journey times between clients.

Following the launch of North Yorkshire Council in April 2023, a plan was drawn up to achieve more than £52 million in further savings – although this has still left a predicted £34 million annual deficit by March 31, 2028.