Local government finance review 'not good news' for North Yorkshire
North Yorkshire Council leader Carl Les added that the government's so-called fair funding review was likely to lead to a significant loss of funding for the authority.
In an update to fellow councillors, Cllr Les added that while the government has set out its approach for the review, it had not explained how the change in funding would affect individual councils.
The authority is working on its response be to an eight-week consultation on the review which runs until August 15.
Cllr Les said: 'The formula behind the funding of local government is notoriously complex
'This consultation is extremely important for the future of the council and we have our own financial experts working with others from across the sector to try and understand the full implications.
'The initial view that I've been given as colleagues work through all of this is that it is not good news.'
Cllr Les added that there were some positive elements, including a better recognition of the extra costs faced by rural authorities for services such as adult social and home-to-school transport.
But he added: 'For North Yorkshire overall, the initial calculations point to a significant loss of funding compared to previous years.'
The Conservative councillor said a particularly difficult element of the government's approach was its plans to introduce council tax equalisation.
'It is proposed that there would be 100 per cent equalisation, which means the government nets off the full amount of our council tax base in arriving at allocations of council funding.
'The effect of this is to move funding from local authorities such as ours with a relatively high council tax base to other councils with a lower council tax base.'
Cllr Les said this raised questions about the autonomy of local authorities, as well as disincentivising councils to grow their tax base.
'It is interesting that only one in four councils supported this approach in the December consultation on funding reforms,' he added.
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North Yorkshire Council chiefs believe more details of how the government's proposals will affect councils will become clearer in the coming weeks.
'As you would expect, we have already taken the opportunity to go to Westminster and to directly and personally ask our parliamentarians for support with what looks to be a very challenging outcome for the council on future government funding,' Cllr Les said.
The update on the fair funding review will be presented to councillors at a full council meeting on Wednesday next week.
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