NORTH Yorkshire County Council is in an “extremely challenging” situation following the announcement of Government’s funding plans for local authorities.

The financial settlement for local government, announced last week, has reinforced the council’s analysis that major savings are still required to meet the severe restraints on budgets, and that a rise in council tax – the first in four years – could be necessary.

County Councillor John Weighell, the leader of North Yorkshire County Council, said: “The announcement by the Government today is just as difficult as we had anticipated.

“It confirms the accuracy of our planning, and unfortunately emphasises the extremely difficult and challenging predicament in which we find ourselves.”

The county council is on track to save £94m over the four years ending in March 2015, and the announcement confirms that it will have to find a further £77m over the next four years.

This represents a cut in the council’s spending power of more than a third in eight years.

Members of North Yorkshire County Council will be asked in February to approve the authority’s budget for 2014/15. Although no decisions have yet been made, its financial strategy is predicated on a rise in council tax of two per cent.

Paul Cresswell, corporate director for Ryedale District Council, said the full financial picture for the authority would not be clear until early next year.

“We are pleased that we have our draft figures for the next two years. However, the Government’s revenue support grant to Ryedale District Council will be cut by more than 18 per cent in 2014/15 and a further 29 per cent in 2015/16,” he said.