City of York Council will decide whether to raise council tax after Christmas.
A funding package worth more than £64bn to support councils in England to deliver frontline services was announced by Levelling Up Secretary Michael Gove on 18 December.
However, York council leader Claire Douglas said this relies on councils increasing council tax by up to five per cent.
City of York Council will decide any movements in council tax “early after Christmas” as it attempts to save £40m across the next four years.
“The government’s funding settlement includes an assumption that the council will increase council tax by the maximum amount allowed, pushing financial pressure onto local council taxpayers,” Cllr Douglas said.
“Beyond that, the remaining supposed extra funding is a previously announced sum for adult social care services.
“The settlement shows the government has not listened to local government leaders across the country, of all political parties, sounding the alarm on councils’ ability to stay afloat and continue delivering vital services.
“It’s important our residents understand that when services are cut back, it’s the inevitable result of the government’s decisions to reduce what councils are able to do.
“We will continue to do everything we can locally to focus such limited resources on those in most need.”
The fund for adult and children’s social care is a £1bn increase for 2024-25 compared to 2023-24.
Mr Gove has also made it possible for councils to increase council tax by up to three per cent without a local referendum with a further two per cent for those responsible for adult social care services, with additional flexibilities for some authorities.
Like many local authorities across the country, City of York is facing a significant overspend and will cut services in order to make the money back.
It currently forecasts an overspend of £11.1m this financial year.
In November 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.