Fear that more and more local authorities will face funding shortfalls - The Yorkshire Post says

Local authorities are heading towards a financial cliff edge with even councils that previously had a reputation for being well-run facing challenges.

Central government can no longer turn a blind eye to the issues that councils face. A lot of them are already having to make tough choices when it comes to raising revenues.

Chancellor Jeremy Hunt announced at the Autumn Statement last year that local authorities would be allowed to raise council tax by 5 per cent without the need for referendum, previously it was 2 per cent. But clearly that won’t cover increasing costs for councils in the face of inflation and services will suffer. As Gary Fielding, who has been director of finance at North Yorkshire County Council the past decade, warns “this is the most challenging financial year ever”.

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The council is looking to balance the budget by eating into £30m worth of reserves. In three years time he expects the council to have a shortfall of £45m.

Chancellor Jeremy Hunt announced at the Autumn Statement last year that local authorities would be allowed to raise council tax by 5 per cent without the need for referendum. PIC: PAChancellor Jeremy Hunt announced at the Autumn Statement last year that local authorities would be allowed to raise council tax by 5 per cent without the need for referendum. PIC: PA
Chancellor Jeremy Hunt announced at the Autumn Statement last year that local authorities would be allowed to raise council tax by 5 per cent without the need for referendum. PIC: PA

Section 114 notices, which legally suspend spending at a local authority if its head of finance judges it does not have a balanced budget, or an imminent prospect of one, are on the rise meaning money can only be spent to provide statutory minimum services. This isn’t a position that North Yorkshire County Council finds itself in but there’s a fear that many other councils will.

Local authorities have borne the brunt of austerity and are now being pummeled by rising costs. Westminster needs to look at the long-term funding of councils and the best way to ensure vital services are protected.