York Council Budget- spending plans and tax hikes backed

Councillors backed the Labour administration’s tax and spending plans for 2026/7 on Thursday, February 12.

York Council’s Labour Leader Cllr Claire Douglas said the drafting of the budget had been arduous as the authority faces challenges including losing £20 million due to national funding changes.

Liberal Democrat opposition leader Cllr Nigel Ayre said Labour had made a mess locally with finances  while the consequences of the Government’s Fair Funding Review for York will be catastrophic.

The passing of the council’s budget comes amid warnings from its officials of an extremely challenging financial outlook.

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Budget black holes of £10 million are forecast for 2027-8 and 2028-9.

The council also looks set to lose £20 million over three years from the Fair Funding Review which the Government says aims to redirect cash to areas most in need.

Council officials have warned the consequences for residents will be serious and far-reaching, with services set to be cut or stopped entirely in the coming years.

The 4.99 per cent council tax hike approved on Thursday will see yearly charges for a Band D home rise to £1,817.93, excluding police, fire, mayoral and parish precepts.

Spending plans approved for the coming financial year includes £10 million extra for adult social care, with £2.3 million set to be spent on repairs and improvements to council homes.

Crematorium improvements are set to be funded with £585,000 and £200,000 to improve fire safety in hostels.

Funding worth £12 million was also approved for highway maintenance.

City of York Council looks set to lose £20m due to the Government’s Fair Funding Review

The council’s Neighbourhood Caretakers are set to get £90,000, with £60,000 set aside for 250 new cycle hoops and £50,000 for community events.

Savings worth £4.3 million including from reviews of leisure services, building security, new lighting and using AI tools are also planned.

The council’s Labour finance spokesperson Cllr Katie Lomas said ahead of Thursday’s meeting no cuts to frontline services were planned.

Cuts worth £600,000 from York Explore’s contract to run the city’s libraries are still due to be made after they were approved in 2024.

Speaking on Thursday, Cllr Douglas said the administration aimed to raise revenues, reduce costs and would only cut services as a last resort and continue efforts to soften the blow of the Fair Funding Review.

The Labour leader said: “Our council budget is £187 million, it’s a lot of money but it doesn’t go nearly as far as we’d like it to go, it’s been an arduous task.

“We find ourselves in a challenging position to make the books balance and York hasn’t benefited from the Fair Funding Review.

“We can’t underestimate the impact of council tax rises on households, I know how difficult it is raise it when their budgets are stretched.

“There’s never enough to go around and inflation’s only going in one direction, our task is to improve quality at the same time, hollowing out the council will not achieve this.”

Liberal Democrat Cllr Ayre said the council was receiving very little support from the Government but that was a fig leaf for Labour’s mismanagement of finances.

The opposition leader said: “This budget gambles on the future and does little to address the council’s financial sustainability, the process has also been poorly-managed.

“Three years later the administration has delivered nothing of the huge £600,000 cut to library services, it’s a fitting summary of how the administration is run.

“This budget uses one-off spending to plug year-on-year spending gaps, it promises next to nothing for the coming years.”

Conservative group leader Cllr Chris Steward said Labour were raising council tax by the maximum amount allowed despite previously pledging to freeze it.

Cllr Steward said: “We have a Labour council, Labour MPs, a Labour Government and Labour mayor but we have the worst funding settlement.

“This council has vast amounts of money, councillors from all parties will care passionately about things in the budget.

“But with the administration having a majority of one, opposition councillors don’t matter and the budget is a fait accompli.”