The new North Yorkshire Council (NYC) is being accused of threatening to tear funding away from local charities, schools and sports clubs across Ryedale.
Money awarded by Ryedale District Council (RDC) before it was abolished is now being reassessed by the new council before a decision is made whether to pay the funds to the successful organisations.
Ten organisations successfully applied for a share of the councils £3 million Community Infrastructure Levy (CIL) fund.
But at a North Yorkshire executive meeting last week councillors were told that Ryedale did not follow due process.
The funding will now be debated at NYC's Annual General meeting today (May 17).
NYC Cllr Steve Mason said: “It seems to me that NYC does not trust the process that RDC undertook and are duplicating that process all over again, at what cost to the tax-payer? Not just to the authority, but to the applicants in volunteer hours and commitment. I know hundreds of hours has gone into this process.
“As far as I can see, all the hurdles were jumped to ensure Ryedale residents receive what they are due, the funds have been allocated within the rules of the sovereign council at the time, within the timescales, and within legal parameters.
“I suspect that what I’m seeing here is goalposts being moved, different criteria being applied and the money being squirrelled away to plug deficits in other areas of the council budget. I hope these suspicions are wrong.”
Di Keal, chair of RDC's Policy & Resources Committee when the CIL programme was agreed, said: “It is totally unacceptable for NYC to treat the charities and other groups who successfully applied for funding from the district council in this way.
“Each one went through a robust application and assessment and will be delivering excellent projects that will benefit many thousands of people of all ages across Ryedale.
“Some members of NYC have described this as ‘tax-payers money’ when in actual fact it is money raised from housing developments in Ryedale and as such should be spent in Ryedale.
Councillor George Jabbour, who raised a query at the executive meeting, said he had been contacted by a number of organisations concerned about their applications for the CIL.
"After the Direction of the Secretary of State had been issued, RDC decided to launch the CIL Grant Scheme to fund local projects. However, they did so without receiving Section 24 consent from the appropriate local authority.
"Despite this, a number of organisations applied to the CIL Grant Scheme while incorrectly believing that RDC had the authority to award the CIL money.
"NYC has a duty to consider each decision that involves spending taxpayer money according to the priorities and needs of the local community. This is what I expect the Council to be meticulously doing with respect to this matter too.
"Having looked at the individual projects that the various organisations applied to fund, I believe that these are all excellent. I also believe that Members of the Executive would agree with me that they too would support these projects should there be enough financial resources."
Cllr Gareth Dadd, Executive Member for Finance & Resources, said it will be considering the merits of each individual case.
"Once the views of officers have been sought, the North Yorkshire Council will be writing to all of the organisations involved, highlighting to them when the report is due to be considered."
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