Debbie Mitchell explains why York City Council has cash problems

York City Council is planning cuts to offset a forecast £11.4 million overspending next year that would deplete its reserves.

The ruling Labor council group and the opposition Liberal Democrat council group then blamed each other.

The Liberal Democrats have accused Labor of causing the damage since it took office in May.

But Labor says the Liberal Democrat-Green coalition has managed the council’s finances without considering the long-term impact of its decisions while in office.

Now Debbie Mitchell, the council’s chief financial officer – a non-political role as a council officer – has given her assessment of the situation.

She said: “If you look at our history in terms of our fiscal position, our pressures and areas of overspending come up again and again and they are national issues, particularly adult and children’s social care .”

“But our remedial measures to balance our budget were unique [payments].

“We need more government funding; We have a very difficult time coping with any state subsidies and state funding.

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“But if you look at the last three years, for example, we overspent by almost £5 million last year and that was funded through contingent liabilities and other one-off reserves.

“We overspent by £2.5 million the year before and £1.3 million the year before that.

“So you can see that little by little a situation is emerging in which additional spending is increasing.

“Now we’re at a point where we’ve used excess money, one-time money.

“But once it’s gone, it’s gone.”

Council chief operating officer Ian Floyd, another council official, said he was confident the situation was being handled properly.

“It’s a very difficult financial situation, but I would say we can’t handle it,” he said.

“This requires difficult decisions to be made, and many of these decisions require political leadership.”

“What I’ve seen so far shows the ability to provide that political leadership.”

Cllr Katie Lomas, finance manager in the new Labour-run council, recently attacked the former Liberal Democrat government over its financial record.

Cllr Lomas said: “The old Liberal Democrat government managed the council’s finances as if they didn’t have to worry about the consequences, which proved to be right.”

However, York Liberal Democrat leader Cllr Nigel Ayre defended his party’s record.

He said: “Under the leadership of the Liberal Democrats, the council has managed its budget every year for the last four years.

“Be it through the Covid pandemic, through the Liz Truss economic crash, through the rapid inflation after the Ukraine war, without having to make the drastic cuts within the year that were threatened, despite similar pressures over the course of the year.”