York faces an extremely challenging financial outlook as residents are set to be hit by the maximum possible council tax hike.
As YorkMix reported, council tax in York would rise by 4.99 per cent from April, to equivalent to £1,817.43 for a Band D home excluding precepts, if budget proposals for 2026/7 are approved.
Improvements to crematoriums, modernising council houses, replacing vehicles and upgrades to fire safety in local authority-run hostels are among the proposals for spending during the current financial year.
A council report stated unprecedented financial challenges would see some services cut or stopped while York is also set to lose £20 million over three years due to national funding reforms.
It added the consequences for residents, including those struggling to make ends meet, would be serious and far-reaching.
It comes ahead of the proposals going before the council’s Executive on Tuesday, January 27.
The authority’s Labour administration will decide whether to back the proposals ahead of them going before all councillors in February.
The proposed council tax hike includes a core increase of 2.99 per cent and a further 2 per cent for adult social care.
A Budget gap of around £10m-a-year are forecast in 2027/8 and 2028/9, according to the council’s report which estimates it would fall to about £1.9 million by 2029/30.
Proposals for 2026/7 would result in a balanced budget, which the council is legally required to set, but the report stated a £2.1 million overspend remains for the current financial year.
The council is set to be the lowest-funded per head of any unitary authority in the country by 2028/9, a forecast level of £923.
The report stated the reduction was due to the Government’s Fair Funding Review which is set to see York lose £20 million over the next three years.
Ministers have said the review aimed to redirect money towards the areas most in need of Government cash and fund broken public services.
York council’s capital budget proposals for the coming financial year include £585,000 for improvements to crematoriums.
Upgrades to fire safety in council hostels would be funded by £200,000 with £625,000 earmarked for a fleet replacement programme.
Around £2.3m would be spent on repairs and modernising council houses and £37m in funding for highways is expected from the York and North Yorkshire Combined Authority.
Savings worth around £4.3 million include the removal of the £65,000 subsidy to the city’s Make It York tourism and events body.
Cuts to spending on security at council buildings is expected to save around £200,000 in 2026/7, along with £85,000 saved by new lighting.
AI tools including automated note taking in council meetings is expected to save £67,000 in the next financial year, with plans for business management and support savings worth £340,000.
The council’s report on the proposals stated: “Every council service is operating in an extremely challenging environment, with no capacity to absorb additional budget cuts.
“From April 2026, the council’s financial position will deteriorate further, with direct and tangible consequences for residents.
“York residents struggling to make ends meet will be left further behind in real terms, the consequences of the budget pressures are serious and far -reaching.”
