Scarborough Council has been warned that tougher times could be ahead as it gets ready to set its budget.
The authority’s draft financial strategy was presented to the council’s cabinet today with a proposal to increase council tax by 2.99%, the equivalent of an extra £6.82 a year for a Band D property.
The cabinet was warned, however, that the picture for the year after was less clear.
Nick Edwards, the council’s finance director, said that changes to the way business rates were calculated could have an impact on the budget for 2020/21.
He said: “In December 2019 we will get to know our funding from the Government for the coming years. This is where the funding formula will change and we are not certain as to how much we are going to get.
“In addition to that, a lot of our money now comes from business rates and the formula for calculating how much of that we can retain is going to be reset next year.
“Currently, our revenue budget relies on £1m from business rates to prop up the services we provide. This is going to change. It now appears that the Government is going to take out deprivation from the formula, now that will have a big impact in this area.”
The draft budget lays out that the council will make efficiencies and savings totalling £1.544million over the year 2019/20.
The budget report adds that the authority will likely need to make close to £5million in savings by 2022.
The borough council has made £18million in savings from its revenue budget since 2010.
Cllr Bill Chatt (Ind) said he wanted it noted that North Yorkshire County Council was proposing to increases its share of the council tax by 4.99%, an increase of £62.31 a year for Band D properties.
He said: “I just wanted to spell out that our council tax increase is 2.99%, well below the county council, far below the vetoed level of the Police and Crime Commissioner.”
He cited a report from the Local Government Association that showed that 60p out of every £1 that local authorities had in the past did not exist any more.
He added: “How long can we continue? How long at this level can cuts continue before this authority becomes unviable?
“We’ve had Universal Credit and food banks and somebody somewhere has got to realise it is becoming untenable.”
Council leader Cllr Derek Bastiman (Con) said he was “ashamed to think” there were people having to use food banks to survive in the borough.
The budget will be debated and voted upon by the authority’s Full Council on March 1.