Council plans for the future amid toughest financial outlook since launch of austerity

Rising inflation, decades of underfunding, and growing demand for services have created major financial strains for local authorities across the country – including City of York Council. To address these pressures, the Council has published its budget proposals for 2026/27.

York’s ageing population, with increasingly complex health needs, are increasing demand for social care. Significant pressures on local health services are in turn pushing more pressure onto councils.

Following the national Fair Funding Review, York is projected to be the lowest funded unitary authority per head of population in England by the end of the 3-year spending review period in 2028-29.

Lower than average council tax rates and low levels of deprivation compared to other parts of the country mean York receives less funding, despite the real hardship experienced by some residents.

The council has delivered real improvements and efficiencies within Children’s Services and is working hard to do the same within Adult Social Care. It also supports many other important priorities, including keeping our city clean and moving, and supporting investment in jobs and new homes.

Councillor Claire Douglas, Leader of City of York Council, said:

“Our budget must go beyond simply balancing the books — it must ensure the council is supporting those in most need, operating more efficiently and planning for the future needs of all our citizens and businesses. It must also explore all opportunities to raise income, in line with what residents told us in our previous budget consultation.

“The council will continue to deliver its Council Plan priorities, including on housing, the economy, improving transport and tackling cost of living challenges, while ensuring we focus on important, everyday services. This budget, while incredibly difficult, achieves the right balance for our city”.

 The council’s proposed budget includes almost £400k in one-off investment items for 2026-27, reflecting the council’s commitment to our communities.  Following a successful launch, the Neighbourhood Caretakers Team budget will increase to provide additional capacity, the city’s weed control contract is to be brought in-house to improve performance, while £50k is to be provided to support community activities and events across York. The city is also set to see a boost in cycle parking with around another 250 cycle parking hoops planned.

 Councillor Katie Lomas Executive Member for Finance, Performance, Major Projects and Equalities at City of York Council, said:

“This budget is extremely challenging, and the national funding settlement means future years will be even tougher. With limited resources, we have focussed spend to those in most need, such as adults with care needs.   

“With strong financial management and a firm control on our costs, we have the best chance of balancing the council’s budget in 2026-27, while continuing to deliver those important day to day services our residents expect and really value”.

 The Budget proposals are being presented for discussion at the Council’s Executive on Thursday 27 January, and will be voted on at a Full Council meeting on Thursday 12 February.