The loss of millions of pounds in funding from the Government to support services in the county’s rural areas will intensify financial pressures and impact on supporting countryside communities, our deputy leader has warned.
Ministers have confirmed that a £110 million package of funding for councils covering rural parts of England will be stopped following the announcement of the local government funding policy for the next financial year.
We received the greatest share nationally of the rural services delivery grant with £14.2 million in funding each year.
The funding was a recognition from Westminster of the challenges of providing services across deeply rural communities.
Deputy leader, Cllr Gareth Dadd, warned that cutting the funding will leave many authorities covering rural areas in a far more perilous financial state when compared to urban councils.
Cllr Dadd, whose responsibilities include the council’s finances, said: “All councils are faced with an unenviable financial predicament at the moment, but we need to make sure that rural parts of the country are given their fair share of funding to support the vital services we deliver.
“The Government has confirmed it will embark on a spending review, but there has to be a commitment that this is carried out in a fair and equal way.
“Ministers have said that one of the key factors for assessing what funding a council receives is the level of deprivation that is being seen in a particular area of the country.
“However, this cannot skew funding to more urban areas of the country, as while efforts to support those most in need is a vital consideration, this cannot be at the detriment of our countryside communities.
“We have a high population of older people and, given the pressures in the social care market, we are seeing financial challenges regardless of any link to deprivation.
“The loss of the rural services delivery grant will have a major impact in North Yorkshire and has left us with a multi-million pound shortfall that will impact on our budget which is already under immense pressure.
“The Government has announced it is cutting the grant in advance of a spending review without considering the full impact on rural communities. I would urge the Government to ensure that the spending review is carried out in a measured and considered way to allow all councils to receive the funding allocation that they deserve.”
The financial pressures which we are facing has meant that our predicted annual deficit was about £90 million at the start of this financial year.
The shortfall has been compounded by the unrelenting demand for care of older people, working age adults, and children and young people.
The latest annual report from North Yorkshire's director of public health, Louise Wallace, has revealed that 24 per cent of people in the county are now aged 65 or over, compared to 18 per cent elsewhere in England.
It is expected that the number of residents aged over 65 in North Yorkshire will increase by 51,100 - a rise of 31 per cent - by 2043. This would mean a third of the county’s population will be aged over 65, accentuating the pressures on care services.
The county’s sparsely populated communities have compounded the challenges of providing services to the public, as economies of scale are far diminished when compared to more urban areas of the country.
We spend 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 us 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. We purchase more than two million hours of care for people in their homes each year.
During a speech to the Local Government Association’s conference in Harrogate in October, Cllr Dadd called on the Government to embark on major reforms for the funding of local authorities to ease financial pressures.
Cllr Dadd warned that there is not enough capacity to cope with the demand for care, and costs have soared at the expense of the taxpayer. He said that individual packages of care for more than £1 million a year are now becoming a “more regular feature” in North Yorkshire.
Due to the escalating demand and the cost of providing council services, it had been predicted that we would have an annual deficit of about £48 million by the 2026/27 financial year.
The challenging financial situation is now set to deteriorate significantly with the loss of the rural services delivery grant, while councillors face difficult choices over savings for the next financial year.
Following our launch in April last year, a plan has been drawn up to achieve more than £40 million in savings – although this had still left the predicted £48 million annual deficit by March 2027.