North Yorkshire Council is using a 4.99% council tax increase in its financial plans for 2027/28, warning that a one percentage point reduction against that assumption would leave a £5 million funding shortfall.
The figure is included in the council’s Medium Term Financial Strategy (MTFS), which covers the three financial years from 2026/27 to 2028/29.
However, the council has stressed that the final increase for 2027/28 has not yet been decided, with councillors due to consider the proposed budget at a meeting in February next year.
Responding to questions about the financial implications of setting a lower increase, the council said the Government’s own calculations of local authorities’ core spending power assume council tax rises of 4.99% in each of the three financial years.
The council said ministers had placed a heavy reliance on council taxpayers to help finance local authority budgets and plug funding gaps.
The assumed 4.99% increase includes a two percentage point precept for adult social care.
Asked what would happen if the council opted for a lower increase, North Yorkshire Council said any reduction below 4.99% would affect its financial position.
It gave the example of a one percentage point reduction against the increase in its current budget, which it said would have left a £5 million funding shortfall.
The council confirmed that a range of council tax increase options is always considered when preparing a proposed budget.
However, its response did not provide a separate calculation of the income difference that a lower increase would create in 2027/28, nor did it explain how the council would manage any resulting shortfall.
Instead, the council said full details of its proposed budget for the next financial year would be published in a report ahead of an executive meeting in January.
The proposed budget will then be discussed at a full council meeting in February, when elected members will decide on the council tax increase.