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North Yorkshire Council Facing 'Armageddon'

North Yorkshire Council Facing 'Armageddon'

Published by Local Democracy Reporter Lachlan Leeming at 5:31pm 16th October 2019.

The budget of England’s largest county council could blow out by an extra £25m a year if funding arrangements with central Government don’t change, it has been warned.

North Yorkshire’s director of resources Gary Fielding said an “Armageddon” scenario would see costs related to high needs education balloon to an extra cost of £25m per annum over the next five years, forcing the authority to make wholesale cuts to services elsewhere in order to balance its budget.

The warning comes as Mr Fielding called for clarity from central Government over long-term funding, saying that local authorities were currently “in the dark” about what assistance they would get beyond March 2021.

His concerns about Special Educational Needs and Disabilities funding (SEND) highlight a national problem faced by councils, as demand for high needs education spirals.

He said councils across the country had so far used spare school grants to help tackle those rising costs – but warned it wasn’t a sustainable action.

He said:

“Once (those grants) go, it never comes back – so all of a sudden, it just goes ‘pop'.

North Yorkshire went ‘pop’ just over a year ago.

I don’t know a single council that’s not projecting to go ‘pop’ on this over the next two years.

This is a national phenomenon, we aren’t on our own, but we went pop a bit earlier because our funding levels are historically a bit lower.”

Not helping is regular Government grants shrinking to one per cent of the council’s funding, down to zero.

It’s left the council contemplating the worst-case scenario if the Government doesn’t change funding arrangements in the coming years.

Ultimately (if we reach a £25m annual overspend)…which I’d like to think is the Armageddon scenario, but if it reaches that it’s at the extremely difficult stage (of affording high needs education costs).

That’s not a couple of actions, that’s a massive restructure of what we do.

The council would have to look “right across the board” at what further savings it would have to take – which could impact sectors as varied as highways, libraries and its own back office."

He said while the council had a track-record of managing budget difficulties – with £197m of cuts to services made over the last eight years – “it’s just getting harder”.

Gary said:

“All the low-hanging fruit is gone, the middle-hanging fruit is gone, so we’re on tiptoes on ladders now…I am less and less confident we have the ability and options at our disposal to meet those needs."

Although the figures make for grim reading, Mr Fielding said there was some reason to feel optimistic, following Chancellor Sajid Javid’s September announcement that an extra £700m would be put toward high needs education.

Gary added:

“If we’d spoken two months ago, I’d be really, really pessimistic.

What I would say now is that with the Government putting in that £700m – even though it’s nowhere near enough – it has recognised it is facing a problem.” 

He also welcomed a national review into SEND education, which he felt was likely to bring some positive news for councils around the country.

However the need for more clarity on what the Government would contribute in the future was needed.

Mr Fielding said local authorities have been hindered since spending reviews shrunk from two or three-year forecasts, with a yearly one announced in September.

He added:

“One of the biggest issues is that we have is that we have a spending round that takes us to the March 31, 2021, beyond that there is no visibility on anything whatsoever,” he said. 

Is that (£25m yearly overspend) going to come true or are we going to be all ‘hunky dory’?

So we have to start planning now on what kind of things we’d have to do (to cover the overspend)…but some of those are so difficult it’s not the type of things you want to start worrying people about, because we don’t know if we need to do them.”

He said the council was now faced with setting a budget for the next financial year without knowing what was coming the year after.

However, the council would work to avoid being pushed into making “emergency decisions”.

He said:

“When you get draconian, you start to get decisions that aren’t very smart, because you’re living hand to mouth, you’re making emergency decisions.”

Mr Fielding said the authority was now making multiple plans for “different scenarios” which could arise depending on Government funding.

He said:

“We just don’t know where we’re going to be.

Until national politics sorts itself out and sets a new spending review which lets us know where we’ll be beyond a year, we’re a bit in the dark.”

 

 

Comments

There are 2 comments on this page.

zara, on 16th October 2019 6:05pm
well they could have saved over a million on bailing out Welcome to Yorkshire. Maybe if they concentrated on the basics they might be able to balance their budget
Fileyman, on 16th October 2019 7:02pm
So please explain the £1m plus given to Welcome To Yorkshire.

A story which can be found on these pages.

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