City of York Council calls for fairer Government funding

webnexttech | City of York Council calls for fairer Government funding

According to the Bank of England’s inflation calculator, the council’s revenue budget from 2010 of £118 million should now be worth around £173.5 million if council services remained the same. However, the council’s budget for the financial year starting in 2024 is worth around just £150 million – a £23.5 million difference. Local authorities’ budgets are made up of council tax income, government grants and business rate retention – but councils across the country have seen their spending power drop by about 10 per cent since austerity was introduced in 2010 by the coalition government, according to the Institute for Government. The Labour-run council’s executive member for finance, Cllr Katie Lomas, said: “The conscious decisions of the coalition government in 2010 and subsequent Conservative governments have been to shrink local councils and what services they can provide for their communities. “We can debate why funding to councils has been cut so significantly, but that it has been for well over a decade is a fact. “The £44 million in government grant we received in 2010 would today be worth around £64 million, and yet the external funding we now receive is only around £35 million, leaving us almost £30 million short on an annual budget of almost £150 million . “As a Labour administration, we’ll always deliver a balanced budget but the constraints and controls placed on local councils by current central government policy means we are largely managing Conservative national cuts at the local level. “We’re hopeful a future Labour government will begin to stem this loss of funding and give local government greater long-term certainty over its funding, as well as finding a long-term national solution for the funding of adult social care, which has been put off and put off for far too long. “Lastly, York is ranked bottom of the national funding table for all public services combined, so we continue to make the case to the government to give York a fair deal, something which is long overdue.” Henri Murison, chief executive at the Northern Powerhouse Partnership, said: “Council tax now makes up three-quarters of York council’s funding. “This will continue to increase year on year as a proportion of the budget, as the council has no choice but to put in place the highest permitted increase of 4.99 per cent without a referendum. “It is unfair to local people that the costs for vital services for the most vulnerable increase when government funding is insufficient. “This leaves less and less money for services that benefit the wider community. “Simply put, it is unsustainable that the government continues to put more and more of the burden on such a regressive form of taxation. “The City of York Council has shown clear leadership to support calls for fairer ways to fund local services. “For the York and North Yorkshire devolution deal to succeed, both local authorities need a fair and sustainable way to fund their own services year to year. “New powers are needed immediately, including the ability to levy a tourism tax on Airbnb and the wider sector.” A Department for Levelling Up, Housing and Communities spokesperson said: “We recognise councils are facing challenges and that is why we recently announced an additional £600 million support package for councils across England, increasing their overall funding for the upcoming financial year to £64.7 billion, a 7.5 per cent increase in cash terms. “Councils are responsible for their own finances and set council tax levels, but we have been clear they should be mindful of cost-of-living pressures. “We continue to protect taxpayers from excessive council tax increases through referendum principles.” Despite councils being in charge of their finances, there is a cap to how much council tax can be increased by the government. Other income, including government grants and business rates retention, is also government-controlled. The department for Levelling Up suggested York’s ‘core spending power’ is up to £172.5 million for 2024-25, an increase of £11.3 million. However, this includes an assumption around growth in the council tax base – the number of properties charged – and that the council will implement the maximum increase in council tax. It also includes the Better Care Fund, adult social care grants and a whole range of other specific grants. Of the £172.5 million quoted by the government, £113 million of it is public-funded council tax.

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