York responds to Autumn Statement with warnings for its Medium Term Financial Strategy

City of York Council has responded to the Government’s Autumn Statement.

City of York Council has responded to the Government’s Autumn Statement, by pointing to its a new four-year financial plan, designed to help it meet both its budgetary challenges, and the priorities of the council’s new Council plan, One City For All, and warning that over the next four years the Council will see some of the most significant financial challenges it has ever experienced.

A report to the Council’s Executive committee says delivery of the Council’s Medium Term Financial Strategy will be extremely challenging for residents, partners, members, and officers and that the level of savings required over the next four years will inevitably require reductions in service levels and may result in some services stopping completely.

The Council's Medium Term Financial Strategy, designed to ensure the Council meets future financial challenges and produces a robust budget, covers a four year period and aims to ensure that, as far as possible, resources are aligned to the Council Plan priorities. The report outlines the financial strategy, including key assumptions and identifies a budget gap of £40m over the next 4 years. It also outlines an approach to budget planning which should ensure savings are identified.

Councillor Claire Douglas, Leader of the Council said,

“There is nothing in this Autumn Statement which gets anywhere near easing the pressures on local council budgets across the UK. We have recently seen BBC reports that one in ten of England’s county councils is facing effective bankruptcy, and that follows on from the crises we have already seen in other councils. We are absolutely committed to the promises we agreed as a council in the new four-year plan, ‘One City for All’, but it is increasingly clear that if we are to maintain a balanced budget and if we are to keep this council afloat, we need robust financial management, clear priorities and a focus on cost control.

“There will have to be cuts, and a root and branch challenge to all council expenditure. There will have to be a hard look at the levels of capital investment. We will deliver our plan - we are already delivering our plan, and that includes supporting people who are being hit hard by the cost of living crisis - but we cannot do that alone, and we cannot do that with the financial resources we have now”.

The Medium Term Financial Strategy Update, presented to York Council’s Executive committee makes clear that increased demand for services and ongoing cost pressures across all services, along with the limited funding available to the Council, could mean that there are not enough resources available to support the delivery of the Council Plan. Continued overspending will weaken the Council’s financial position, reducing financial stability and resilience.

Councillor Katie Lomas, Executive Member for Finance, Performance, Major Projects and Equalities said,

“Everybody understands the financial challenge facing Local Government is significant and worsening. In York we have the added problem of an historically low base for our income, and that means the Council will have to make many difficult decisions in the coming years. Uncertainty regarding our funding makes long term planning difficult, so the Council will need to be flexible in its approach to financial planning. Today’s Autumn Statement, beyond recovery of full planning costs, is entirely silent on the crisis in local government funding.

“As a result, it’s important that nobody underestimates the scale of the challenge ahead. For York it means we can’t continue to do everything and deliver a balanced budget. We must identify savings, and opportunities to work in partnership with others. We will need to continually review and refine our Medium Term Financial Strategy, as we understand Government announcements on funding. But the people of York need to be in no doubt, since 2010/11 we have endured a reduction of 28.5% in real terms which, when you include funding for other public services, leaves us bottom of the funding table for local services. Government must do a lot more to support us, and if the extra help doesn’t come, we have some very serious problems to address.”

The financial report makes clear that budget reductions of £10m are needed in 2024/25 to allow for known costs such as inflation and pay awards. With growing increases in demand for social care services and continued cost of living inflation, the savings needed by the authority are higher than in previous years, when the Council had to make significant budget savings (2023/24)