Forecasts warning York Council could lose £15 million following a national funding review have been disputed by the Government amid fears over the potential impact on the authority’s finances.
A report stated council officials expected changes resulting from the ongoing Fair Funding Review would see York receive £15 million less over three years from 2028.
Cllr Katie Lomas, finance spokesperson for the council’s Labour administration, said they were working to get the best outcome for York while the final outcome of the review remains unknown.
But opposition Liberal Democrat finance spokesperson Cllr Paul Healey and Conservative group leader Cllr Chris Steward said they feared for council services if the money is lost.
A Government spokesperson said they were fixing the outdated way councils are funded so people in York and across the country can have the public services they deserve.
It comes as the Government’s response to a consultation with councils in the summer on the Fair Funding Review is set to be published this autumn.
The review aims to address what the Government believes is the broken link between funding and the need for services by changing how money is allocated to local areas.
Government officials have stated they will provide £3.4bn more in grant funding to local areas over the next three years and redirect around £2bn to communities which need it most.
The Ministry of Housing, Communities and Local Government expects most councils will see the funds they have for services, or core spending power, increase in real terms.
But York Council’s report stated they could lose the equivalent of eight per cent of their core spending power over three years if changes proposed in the review go ahead.
It added the potential loss of £15 million due to the review comes as the council is currently facing a £33.7 million budget black hole over the next three years.
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The Government’s spokesperson said they do not recognise the £15 million figure.
The spokesperson said: “For too long families have faced ever-increasing bills while councils don’t get the support they need from government.
“That’s why we’re fixing the outdated funding system we inherited so that funding finally matches need.”
But Liberal Democrat finance spokesperson Cllr Healey said the forecasts pointed to Labour cutting funding nationally while the local party fails to fight back.
Cllr Healey said: “This is money that could have supported social care, invested in our communities, and protected our environment.”
Conservative group leader Cllr Steward said funding cuts would have a serious impact on already stretched services.
Cllr Steward said: “For the 14 years of Conservative and Conservative and Liberal Democrat coalition government, Labour criticised government funding as not enough.
“They are now making the situation much worse and they should join us in condemning the Labour ministers who are treating York shockingly.”
Labour’s finance spokesperson Cllr Lomas said they, the city’s Labour MPs Rachael Maskell and Luke Charters and Mayor David Skaith had lobbied to ensure the review recognises York’s unique position.
Research from the Institute for Fiscal Studies (IFS) think tank has found that York is one of the lowest-funded authorities per head of any in the country.
Cllr Lomas added changes the council is making to try close its budget gap would take time following news of the increase in the three-year shortfall to £33.7 million.
The finance executive member told the council’s executive on Tuesday, November 4: “We’ve been working hard to lobby the Government and we’re disappointed that we couldn’t do so on a cross-party basis.
“The Liberal Democrats only wanted to gripe from the sidelines but it’s positive action that will get us somewhere, there’s still lots of unknowns and uncertainty around this.”
Council Leader Cllr Claire Douglas said they would continue to engage with the Government in the run up to its confirmation of this year’s local authority funding settlement in December.
The council leader said: “Opposition groups could contribute constructively by working with us on this for the good of York and all our residents.”
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