Council tax harmonisation
The creation of North Yorkshire Council means that there is a legal requirement to make sure all council taxpayers in the county are charged the same amount based on the council tax band of their home.
The move to unify all council tax bills across all of North Yorkshire will be spread over the next two financial years as some areas are paying higher charges than others.
The average increase for council tax is 4.99% for 2023/24, which includes a 2.99% in general council tax and a 2% increase for adult social care. However, the work to unify all bills will mean some residents will pay more than the average rise and some will pay less.
Council tax increases are subject to referendum limits. This means that the government in effect sets an upper level to increases. If a council wishes to exceed those limits then it requires a referendum of local residents to approve the increase. For 2023/24 the government confirmed this limit as 2.99% for general council tax and 2% for the adult social care precept.
For areas like North Yorkshire going through reorganisation these increases can be applied against the average charge across all the predecessor councils. So, in other words, the average of all the Band D council tax charges in 2022/23 from the eight councils which make up the new North Yorkshire Council. This figure is £1676.32.
The 4.99% increase and the referendum test apply to this figure which gives cash increases of:
- general Council Tax (2.99% increase) - £50.12
- Adult Social Care Precept (2.00% increase) - £33.52
These increases apply equally to all areas.
The adult social care charge for 2023/24 will be the 2022/23 charge (£168.53) plus the increase above (£33.52) giving a new rate of £202.05 which will be the same for all Band D taxpayers.
But for general council tax, on top of this increase are adjustments for harmonising the rates (moving them towards the same charge for all North Yorkshire council taxpayers in a particular band).
For districts where their 2022/23 council tax charge was below the average there is an additional charge and for those where their bill exceeded the average there is a reduction as we move towards a single uniform charge.
This means while the overall increase is 2.99% the charge at individual district level will vary from this, both up and down.
To illustrate this for Hambleton residents:
|2022/23 charge (Band D)
The £44.66 basically represents half the gap between the 2022/23 charge for Hambleton and the overall average for North Yorkshire. Half because harmonisation will occur over two years.
The equivalent figures for all of the district areas are:
|2022/23 charge (Band D)
So for 2023/24 those districts with lower bills in 2022/23 they will see the biggest percentage increases but still pay a lower charge than taxpayers from areas with higher charges in 2022/23.
In February 2023, we agreed a budget for the financial year 2023/24 after we asked North Yorkshire residents to help us decide how to manage and prioritise our finances as part of our annual budget consultation. Read the detailed budget documents here (pdf / 5 MB).
This has been one of the most challenging financial environments for local government in living memory. Inflation has had a major impact and is estimated, together with staff pay awards, to cost North Yorkshire Council over £68 million in 2023/24. To set this in context, a 1% increase in council tax raises just over £4 million.
We are also seeing continuing high demand for services particularly in the areas of adult social care and children’s services. This has been made worse by the difficulties of staff recruitment and retention whilst the COVID-19 pandemic continues to cause difficulties.
We are very aware of the pressures on household budgets but despite using our reserves and finding even more areas where we can make savings, without compromising frontline services, we do need to increase council tax to meet these pressures. In February 2023, councillors voted for general council tax to increase by 2.99% along with an increase in the adult social care precept of 2%. The overall 4.99% increase will be equivalent to just under £7 a month for an average household.