Leeds City Council is grappling with a staggering £273.7 million in savings needed over the next five years due to soaring service costs, especially for vulnerable adults and children. Despite a recruitment freeze and spending restrictions, the council remains committed to its vision of making Leeds a zero-carbon city that promotes inclusive growth and combats poverty.
What financial challenges is Leeds City Council currently facing?
Leeds City Council is tasked with finding £273.7 million in savings over the next five years amidst rising service costs and demand, particularly for vulnerable adults and children. They’ve initiated a recruitment freeze and restricted non-essential spending, while maintaining a commitment to strategic ambitions like inclusive growth and a zero-carbon footprint.
Fiscal Challenges and Strategy
The economic landscape for Leeds City Council is one marked by adversity and resilience. A recently published update to the council’s five-year medium term financial strategy delineates the formidable task of achieving balanced budgets under the yoke of significant financial strain. With a requirement to identify £273.7 million in savings over the next five fiscal years, the council’s executive board meeting underscored the gravity of the situation.
The financial forecast for Leeds is not unique, reflecting a nationwide crisis among councils facing soaring service costs and an ever-growing demand. Particularly, services for vulnerable adults and children, including those for looked after children with heightened needs and adults requiring social care, are seeing unprecedented demand. These services, essential for the well-being of society’s most vulnerable, represent a considerable portion of the fiscal burden with costs for external placements averaging £350,000 per year.
The predicament Leeds City Council finds itself in is a continuation of a decade-long struggle with austerity, having already enacted savings of £794.1 million since 2010. Councillor Debra Coupar, Deputy Leader and executive member for resources, commented on the enormity of the challenge, stating, “It is not an overstatement to say that this is the most challenging financial period so far facing local authorities… We need to find a further £63.9 million of savings this year and then in addition to that over £273 million more across the next five years.”
Pressures and Priorities
The financial strategy report sheds light on the pressures contributing to the council’s fiscal woes. These include an increase in children requiring care, rising costs of placements through private providers, and heightened demand within adult social care for older people, adults with learning disabilities, and individuals with mental health needs. The upcoming year alone presents a need for £63.9 million in savings, representing a 10% reduction of the council’s annual net revenue budget.
The breakdown over the subsequent five years is equally challenging:
- £106.7 million in 2025/26
- £45.7 million in 2026/27
- £42.1 million in 2027/28
- £37.3 million in 2028/29
- £41.9 million in 2029/30
In response, all council assets and services remain under continuous review for potential financial mitigation. The council has also instituted a recruitment freeze and a restriction on non-essential spending, barring health and safety or statutory requirements. Despite these measures, council tax in Leeds continues to be the second-lowest among England’s eight core cities, with an increase of 4.98 percent for the current financial year.
Commitment to Strategic Ambitions
Amidst fiscal adversity, Leeds City Council remains steadfast in its commitment to the “Best City Ambition,” aiming to shape Leeds into a city of opportunity, combating poverty and inequality. This ambition hinges on health and wellbeing, inclusive growth, and the pursuit of a zero-carbon footprint. The council’s determination to work collaboratively under the ‘Team Leeds’ approach seeks to leverage all resources across the city to realize this vision.
Despite the daunting financial outlook, the council is devoted to fostering a city that values partnerships and collective efforts to achieve common goals. These endeavors are essential to maintaining Leeds as an inclusive, economically robust, and environmentally conscious city.
For further insights into the council’s financial planning and strategy, the public is encouraged to view the medium term financial strategy report available on the official council website – Council and democracy (leeds.gov.uk) – under agenda item 14.
Notes to Editors:
It is imperative to note that Leeds is not alone in facing such fiscal constraints. Since February 2018, a total of seven councils in England have been compelled to issue section 114 notices, signaling their inability to balance their budgets. Moreover, a survey by the Local Government Association in December 2023 revealed that nearly one in five council leaders and chief executives feared they might have to issue similar notices following a cashless Autumn Statement. The survey’s details can be viewed at Local Government Association.
With these challenges laid bare, the situation necessitates a concerted effort from all sectors of government and the community to navigate the financial hurdles ahead.
- Leeds City Council faces a daunting task of identifying £273.7 million in savings over the next five years due to rising service costs, particularly for vulnerable adults and children.
- The council has implemented a recruitment freeze and restricted non-essential spending to combat its fiscal challenges while remaining committed to its strategic goals.
- The council must find £63.9 million in savings this year alone, which represents a 10% reduction of its annual net revenue budget.
- The financial pressures include an increasing number of children requiring care and escalating costs for placements through private providers.
- Despite financial hardships, Leeds City Council is dedicated to its “Best City Ambition” aiming for inclusive growth and a zero-carbon footprint.