Yorkshire council leader warns of impact of living wage

North Yorkshire County Council estimates the measure, announced by the Chancellor in his Summer Budget, will cost the authority an extra £3 million a year in wages with schools in the county facing a further £3 million cost.

The national living wage will come into force in April and means any worker over 25 years old should be paid at least £7.20 an hour.

Councils across the region are already making major cutbacks and are expecting their finances to be further squeezed when Mr Osborne reveals the outcome of his review of Government spending later this month.

In his statement to North Yorkshire County Council's next full meeting, council leader Carl Les will say: "I’m sure we all collectively recognise the many benefits of an increased living wage but it does have an impact on council finances and if this isn’t taken in to account in the comprehensive spending review will have an impact on the delivery of services."

Coun Les will broadly welcome Mr Osborne's plan to allow councils to keep all the business rates that they raise but call for a review of the way the money is split between district and county councils in two-tier council areas such as North Yorkshire.

He will say: "The largest elements of local government expenditure are adult social care, children’s services and the maintenance of highway infrastructure. Future funding needs to reflect these realities.

"In terms of defining any base line position the essential characteristics of North Yorkshire also need to be recognised in terms of an ageing population and the cost of delivering

rural services."