Find out where the council's money comes from and where it is spent.
North Yorkshire Council is facing a very challenging financial situation. Demand for our services continues to rise in many areas and the costs of providing vital care continue to soar, especially those for adults and children and young people. Reform is awaited on how social care is delivered and funded and on special education needs and disabilities. This is a situation that is replicated around the country, not just in North Yorkshire.
North Yorkshire has, however, received the fourth lowest funding settlements of all county, unitary, London or metropolitan councils. This is directly as a result of the loss of a £14.3 million grant each year to support the delivery of services in rural areas, and this is in addition to around £8.5 million of unfunded increases in employers’ national insurance contributions. These two changes alone are equivalent to a 4.96% increase in council tax.
Since the council came into existence (April 2023), it has worked up a plan to deliver almost £60 million per annum of savings that are due to local government reorganisation. This has meant that the council has been able to fund many of the increased costs so far without impacting greatly upon vital frontline services that protect some of the most vulnerable people in society. Despite these savings, when we add up the money coming in and the money we must pay out, there is a shortfall of about £5 million for next year but we anticipate this shortfall will increase to around £34 million by the end of 2027/2028.
The budget is to be balanced in 2025/2026 year by using one-off reserves and that is after council tax rises by the maximum amount of 4.99 per cent before a referendum is required. It is recognised that this will be hard for some people and so the council is continuing to provide financial support to the most disadvantaged through a £42 million council tax reduction scheme and other support such as the Local Assistance Fund.
Rest assured that the council is already working hard to address the shortfalls and will be looking to do as much as it can by reducing spending, increasing income and protecting those services to the most vulnerable. The leadership of the council will also be doing all that they can to ensure that the rural and urban concerns of North Yorkshire residents, businesses and communities are heard.
If you would like any further information, then please read the following section, which includes further detail on the council’s budget and a range of frequently asked questions. If you still have issues you wish to ask about, then please contact us.
My thanks for your ongoing support.
Cllr Carl Les
Leader of the Council
We plan to spend £1261.6 million on providing services to residents. The total gross expenditure for 2025 to 2026 is allocated as follows:
| Directorate gross expenditure | 2025 to 2026 | Percentage of total |
|---|---|---|
| Health and adult services | £444.2 million | 35% |
| Children and young people's services | £159.5 million | 13% |
| Environment and regulatory services | £220.5 million | 17% |
| Central services | £273.9 million | 22% |
| Community development | £73.6 million | 6% |
| Corporate and other services | £89.8 million | 7% |
This is funded from a number of sources, including central government, council tax, business rates and fees and charges on services we provide.
The table below reflects the estimate of gross income to be received in 2025 to 2026.
| Funding | 2025 to 2026 | Percentage of total |
|---|---|---|
| Fees / charges / client contributions | £272.2 million | 21.6% |
| Government grants - centrally held | £105.3 million | 8.3% |
| Government grants - service based | £98.6 million | 7.8% |
| Joint arrangements | £72.9 million | 5.8% |
| Investment / commercial and other income | £71.8 million | 5.7% |
| Use of reserves | £4.9 million | 0.4% |
| Council tax income | £494.2 million | 39.2% |
| Business rates | £141.8 million | 11.2% |
Schools are funded by a dedicated schools grant from central government and £636m has been allocated in 2025 to 2026. This amount includes both maintained schools and academies but excludes sixth form funding and pupil premium.
We plan to spend £327.4m on capital projects during 2025 to 2026. Capital spending comes from a separate 'pot', which is financed from a combination of grants and contributions, borrowing, revenue budgets and capital receipts from the sales of properties.
| Capital spending by function | 2025 to 2026 |
|---|---|
| Highways and environment | £150.4 million |
| Housing | £84.3 million |
| Education | £25.1 million |
| Economic development and regeneration | £27.1 million |
| Public transport | £0 million |
| Property and fleet | £12.1 million |
| IT infrastructure | £3.4 million |
| Social care | £7.2 million |
| Culture, arts and leisure | £4.3 million |
| Other provisions | £13.5 million |
| Total | £327.4 million |
Council tax will be collected by North Yorkshire Council, but the money raised is spent not only by the council but by various other bodies including parish and town councils, police and fire and rescue services.
You will usually receive your council tax bill in March of each year, if you are 18 or over, and own or rent a home.
For 2025 to 2026 our overall average Band D charge has been set at £1,939.54 – that is an increase of 4.99% on the charge for 2025 to 2026. Of this increase, 2.99% relates to general council tax and 2% to the adult social care precept.
When North Yorkshire Council was created, we decided on a two-year harmonisation period to create a common council tax rate across the former district and borough council areas. As of 2025 to 2026, this is now complete and all properties in the same council tax band are being charged the same core council tax rate.
You may notice that unlike bills in previous years, there is no element of your bill for the adult social care precept, this follows new government guidance. Instead, all the money being collected for the council (including that raised through the adult social care precept) is listed as North Yorkshire Council.
View parish precepts and council tax amounts for 2025 to 2026 here.
In May 2024, a mayor was elected to the newly created York and North Yorkshire Combined Authority (YNYCA). The mayor and combined authority have responsibilities including the 30-year mayoral investment fund, adult education budget, community safety, improving the supply and quality of housing and improving transport. These responsibilities include Policing and Fire.
As a result, precept contributions to Policing and Fire are now worded differently on your bill. They still cover the contributions to these services, but are shown as:
The Mayoral Police and Crime precept is a direct comparison with the previous Police precept so the % increase can be shown on the bill. The Mayoral precept including the fire is not a direct comparison with the previous fire precept, so no % increase is shown.
Referendum limits on increasing council tax do not apply to mayoral combined precepts.
Find more precept information on the York and North Yorkshire Combined Authority website here.
The government sets out the rules on how much councils can increase council tax. For 2025 to 2026, the government confirmed the limit for increases is 4.99%.
If we want to increase it by any more than these levels set by the government, we must hold a local referendum.
Local authorities are required by law to have a balanced budget. That is a financial plan based on sound assumptions which shows how income will equal spend over the short and medium-term. Plans would take into account deliverable cost savings and/or local income growth strategies as well as usable reserves.
Reserves are like household savings. The money has been put away to pay for something in the future like a car or as a resource for emergencies such as when the boiler breaks down unexpectedly.
There are two types of council reserves:
Like savings, reserves can only be spent once. If we are not careful in making the best use of our reserves we will be exposed to the risk that if some serious unexpected expenditure is necessary, the money just will not be there.
Our capital budget is spent on fixed assets. That includes new buildings and major refurbishments, buying land or buildings and investment in shares or bonds. The capital budget can be funded from the revenue budget, through borrowing within strict parameters set by the government or from capital receipts. We can only borrow to support the capital budget, not to pay for everyday services. Capital receipts such as the sale of assets can only be used to either repay debt or to support the capital budget.
If, for example, we were to sell an office building we owned, the money received would be a capital receipt and could only be used to repay debt or for the capital budget. It could not be used for funding social care or home to school transport costs or other revenue funded services. Repayment of debt might sound like a good option, however much of our debt is at low fixed interest and we may have to pay significant penalties for paying off debt early.
We have increased our main council tax by 4.99% as the regulations allow us to increase this by up to 4.99% without holding a referendum. The council tax demand shows a 5.0% increase as council tax legislation requires us to display the percentage on the demand to the nearest 0.1%, hence 5.0%.
The council tax referendum principles only apply to annual increases applied by independent major preceptors such as the council or the police, not the overall council tax change. As minor preceptors, town and parish councils are not subject to these rules. From 1 April 2025, the Mayoral General Fund (Fire) was established which is the precepting body responsible for funding North Yorkshire Fire and Rescue Service. As this is a new precept, effectively there is no comparable increase from 2024 to 2025. For clarity however, the percentage change when comparing the Mayoral General Fund (Fire) to the now disbanded North Yorkshire Fire and Rescue Authority preceptor is an increase of 28.9%