North Yorkshire Council chiefs are warning that the authority will need to use £57m from its reserves over the next three years if it does not make savings.
Deputy leader and executive member for finance and resources, Councillor Gareth Dadd, warned colleagues to prepare for the most severe budget round ever faced by the authority.
Cllr Dadd gave the bleak forecast at the council’s monthly executive committee meeting on Tuesday at County Hall in Northallerton.
The senior councillor said the authority was projected to be £5m overspent at the end of the first quarter of the financial year.
He added: “That does hide a growing and worrying trend within children’s services.
“I’m afraid they’re reporting an overspend in excess of £10.4m.
“That can’t be fudged. I know that there’s a national issue there, but it’s certainly an issue within North Yorkshire.”
The councillor continued: “You’ll also note that without action, we will have used reserves to the tune of about £57m by March 2028 and that is before the Fair Funding Review — that will likely give us formula changes and a worsening situation.
“I suppose a strong message is be prepared for the most severe budget round that this authority and its predecessors has ever faced.”
Cllr Dadd said there was some good news with North Yorkshire Highways finding some efficiencies.
He said a national pay award settlement with council staff had also been agreed after an “outbreak of understanding between both sides” that he said had given the authority “a little bit of headroom”.
But he added: “You know what’s £1.4m or £1.5m when you’re looking at a £57m deficit three years hence, but every little helps.”
Gary Fielding, corporate director for resources, confirmed the council was facing “recurring pressures”.
“None of these are really new, but it’s just a continuation of those pressures, particularly on people-related services,” he added.
The government launched its Fair Funding Review 2.0 in June with a consultation exercise that finished last week.
North Yorkshire Council is a member of the Rural Services Network (RSN), which lobbies on behalf of rural authorities.
The RSN says council services cost more to deliver in rural areas and has called for the government review to reflect this.
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