Find out about our latest budget, and about savings we are making by increasing efficiency and working more closely with local communities.
Where does the council's money come from?
Our funding comes from three main areas: central government, council tax and business rates. More information on this year's budget and spending, and how it relates to council tax can be found here.
What is the current situation?
In February 2019, we agreed the budget for the financial year 2019-20, along with the medium term financial strategy up to and including 2021-22. You can access the detailed budget documents here. We also held a consultation to help us decide how to manage and prioritise our finances during 2019-20.
We are at the end of the eighth year of austerity, and the financial challenges are set to continue for the foreseeable future. Our finances have reduced, but demand for our services has risen, particularly relating to our priority areas, including roads, broadband, supporting the elderly and vulnerable, and giving a good start to all young people.
Around a quarter of the county's population is over 65, and demand for adult social care continues to be very high. Also, the need for, and cost of children’s services such as special educational needs is rising this year, both in North Yorkshire and across the UK. As a result, we have to look to deliver our services in different ways, to meet the challenge of doing more with less.
How do we plan to achieve this?
Across the UK, an increasing number of councils report that they are facing large deficits, and do not have sufficient reserves to bridge the financial gap. Here in North Yorkshire however, we have planned in advance. Our long-term approach means we are well placed to work through these uncertain times.
The 2020 North Yorkshire programme continues to set out relevant principles that underpin the council’s approach to change. These principles will continue but, as we approach 2020, it is important that we look forward. We are therefore developing a Beyond 2020 programme, which will improve how we deliver our services by taking on the following challenges:
- Can we deliver better customer outcomes by working differently with partners, communities and individuals, building resilience and avoiding the need for services?
- Where services are required, are they delivered at the most appropriate level to meet customer needs?
- Can we make our processes more customer-focussed and effective, supporting the most vulnerable people to access the right community or partner services to meet their needs, prior to or following contact with the council?
- Can we be more cost-effective at delivering the most appropriate outcomes to meet customer need?
- Can we deliver better customer outcomes and reduce wasteful effort by improving our ways of working, systems and procedures?
We are also working with communities, families and individuals to help older and vulnerable people live independently and well for longer. Through our extra care programme we are providing homes where people can live independently, but with care on hand when they need it.
What have we achieved so far?
Up to the end of the 2018-19 financial year, we had already made revenue savings of around £157.4m. Focusing our savings on increasing our own efficiency has helped us to keep the impact on front line services to a minimum, but the more we need to save, the more difficult this becomes. Almost three quarters of the savings to date have come from efficiency savings (£117m), including:
£45m - Improved ways of working
£25m - Reducing costs of buying goods and services
£20m - Reductions in support services, back office and administrative support
£18m - Increased income from selling services to schools and other councils
£6m - Reductions in the number of managers
£3m - Reductions in staff terms and conditions
We have tried to protect frontline services and only around a quarter of savings (£40m) so far have come from frontline services. These have included:
- changes to library services with many now being run by community groups;
- replacing elderly persons’ homes with extra care housing to better meet the needs of older people, supporting them to retain their independence;
- changing to a model of providing targeted support to children and young people while reducing the number of children’s centres;
- public transport; or
- changes to grass-cutting services.
To find a further £40m of savings to meet the remaining funding gap will be extremely challenging but we are working on plans and proposals for these. We have identified £26.3m of savings that can be made over the financial years 2019-20 to 2021-22, with £14m of savings still to be found. These savings are to be drawn from across all service areas, including: health and adult services, business and environmental services, and children and young people’s services. More details of these proposals can be found within Appendix A of the 2019/20 Budget and MTFS report (pdf / 7 MB).
Frequently asked questions
Local authorities are required by law to have a balanced budget. That is a financial plan based on sound assumptions which shows how income will equal spend over the short- and medium-term. Plans would take into account deliverable cost savings and/or local income growth strategies as well as usable reserves.
Reserves are like household savings. The money has been put away to pay for something in the future like a car or as a resource for emergencies such as when the boiler breaks down unexpectedly.
There are two types of council reserves:
- Earmarked reserves – these are already committed to be spent.
- General reserves – these as for responding to unexpected events such as major funding events.
The amount of general reserves would be enough to fund the council for just 50 days if all funding was to stop. Also with reserves, you can only spend them once. If they are gone, the council would be exposed to the risk that if some serious unexpected expenditure is necessary, the money just won’t be there.
Our capital budget is spent on fixed assets. That includes new buildings and major refurbishments, buying land or buildings and investment in shares or bonds. The capital budget can be funded from the revenue budget, through borrowing (within strict parameters set by government or from capital receipts. We can only borrow to support the capital budget not to pay for everyday services. Capital receipts such as the sale of assets can only be used to either repay debt or to support the capital budget.
So if, for example, we were to sell County Hall, the money received would be a capital receipt and could only be used to redeem debt or for the capital budget. It could not be used for social care or libraries or other services. Redeeming debt might sound like a good option, except of course interest rates are now at an all-time low and we have to pay significant penalties for paying off debt early.