North Yorkshire County Council expects to have spent an extra £93m as a result of the COVID outbreak.
That's the projection from the councils financial team who say that by the end of this year the council will have spent the equivalent of 25% of it's normal annual income dealing with the pandemic.
Gary Fielding is the County Council’s Director of Strategic Resources...
County Councillor Don McKenzie says it's a staggering amount of money.
The councils executive was told yesterday that the pandemic one of the factors that is adding uncertainty to the authorities budgets going forward and that the council is going to need to use £43m of it's reserves over the next three years to balance the books.
Council leader Carl Les says public finances overall are challenging but says there has been support from government during the pandemic.
Carl Les says that while there has been around £20m of cash from the government to help with some of the COVID costs, there are wider issues around central government funding that need to be addressed including revisiting the local government funding review that was delayed last year.
The executive committee was told that while use of reserves is not sustainable, it is necessary next year due to major uncertainties and a squeezed savings.
The Executive are recommanding a council tax increase increase for the next financial year of 3.49%. That would be made up of a general council tax increase of 1.99% and adult social care precept of 1.5%. Government rules do allow the council to increase the adult social care precept by up to 3% but councillors felt this would be too large an increase for local residents who themselves are struggling with the financial effects of COVID.
Cllr Carl Les, North Yorkshire’s Leader says the COVID crisis is one of several issues adding uncertainty to the councils financial planning.
“We hope to be clearer later in the year about the legacy of Covid, the Government’s decision on local government reorganisation in North Yorkshire and the future of council funding beyond 2022.
“The times have never been so uncertain, and given these uncertainties it is critical that the Council maintains as much flexibility as possible in order to protect vital services whilst being able to respond to further potential shocks.
“We understand that residents are facing many difficulties in the light of Covid. We also understand just how vital some of the council’s services are to the most vulnerable in society.”
For this reason the council says it is trying “to get the balance right” by setting adult social care precept at 1.5% rather than the 3% permitted by Government.
The Executive is recommended to agree that a general council tax increase of 1.99% is supplemented with a 1.5% social care precept leading to a total council tax increase of 3.49 per cent.
“We think it is right that we use reserves at this point,” said Cllr Les, “so we can avoid rushing into savings that may be at the expense of services to some of our most vulnerable residents.
“We are also making sure that we can find extra money to support those residents who find themselves in the greatest financial difficulty eg initiatives such as the Local Assistance Fund and the support provided to Community Support Organisations.
“We cannot rule out the possibility that the council may need to set a further budget later in the year once we are clearer about key issues.
“In the meantime, it is important that we all focus on doing the right things to deal with Covid, support people in our communities, help colleagues in the NHS to deliver the vaccination programme and prepare for the recovery in the wake of Covid.”
A council tax increase of 3.49 per cent would lead to an average Band D council tax level of £1,411.05 for 2021/22
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