A senior City of York Council officer has warned that significant cuts to services are “just the beginning of some hard years in the future".

York’s new Labour administration, which was elected into power in May 2023, has the challenge of saving £40 million over the next four years to narrow its cumulative budget gap.

Senior council officers didn’t mince their words when telling executive members what this meant when they met on Thursday, November 16.  Chief finance officer Debbie Mitchell said: “Over the next four years the council will really see some of the most significant financial challenges we’ve ever experienced and I can’t overstate the seriousness of the situation and the scale of the challenge ahead.

“Clearly it’s a national sector-wide challenge and not something that’s unique to York.”

She added that “a combination of things” would be needed to save enough money, “such as maximising external income, a continued focus on organisational efficiency, reviewing contracts and so on".

But Ms Mitchell said: “We won’t save £40 million without some cuts in service.”

Chief operating officer Ian Floyd said: “This is serious.

“This is probably the biggest financial challenge the council will have faced.”

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He added: “When you look at savings and what you might be able to do, there’s often a lot of nice words about efficiencies, transformation and we’ll do things differently.

“You can’t take £40 million out through nice words, you only take it out through some hard cuts.”

Mr Floyd said: “This is really just the beginning of some hard years in the future.”  In September, the City of York Council predicted it would overspend by £11.4 million if immediate action was not taken.  However, a report presented to the council’s executive has shown a “small improvement” in the forecasted overspend, which now stands at £11.1 million.

The report, written by senior council officers, states: “This is still a significant overspend that is of serious concern and it remains very clear that the council cannot afford to keep spending at this level.  “The general reserve is £6.9 million and, whilst we have other earmarked reserves that we could call on if required, continued spending at this level would quickly see the council exhaust its reserves.”

The council’s finance executive member Cllr Katie Lomas admitted that the financial situation is “dire” but said it is in line with many other local authorities.

“There’s been a very slight improvement but it is clear that we need to do more,” she said.

“We have to act now to ensure we end the year with a balanced budget.”

Local authorities are required by law to deliver a balanced budget each year, which Cllr Lomas remains confident the council will be able to do.  She blamed the situation on “13 years of austerity” and poor council funding that has “left York at the bottom of the pile,” referring to York being the worst-funded local authority area in England.  Cllr Lomas said there is “a particular lack of funding for York because of unhelpful ideas that York is an affluent city and everyone has more than enough".

The Liberal Democrat opposition group leader Cllr Nigel Ayre said the financial situation shows the council has “no ability to control the council finances” and that “improvements of only £300,000, even after the unnecessary draconian actions, show a lack of fiscal responsibility".

The leader of the City of York Council Cllr Claire Douglas said she will write to the Chancellor of the Exchequer Jeremy Hunt MP to ensure he is aware of the situation local authorities are in.