Council leader hits out over ‘widening north-south divide’ with more cuts on the way

The Leader of Leeds City Council Councillor Keith Wakefield has again called on the government to address the “widening north-south divide” as it was revealed the council could see its government grant funding cut by a further £65million by 2016.

The national spending review last month confirmed a further reduction in local government funding, which in cash terms is projected to mean government grants for Leeds being cut by £36.2m in 2014-15 and a further £28.7m the following year.

These predicted cuts are for basic grant funding alone, with the overall savings figures needed each year likely to be much higher when rising costs and increasing need for council services are factored in.

The figures will be discussed by the council’s executive board at its meeting at Civic Hall on Wednesday 17 July.

These additional reductions will follow a three-year period which will have seen Leeds City Council, the second-largest local authority in England, make savings of £200m due to grant cuts and cost pressures by March 2014.

The impact of such reductions and how they compare to London and the South East were highlighted in a report produced by the Special Interest Group of Metropolitan Authorities (SIGOMA) last month.

While the rest of the English regions have had their resources cut by £4.5billion in the last three years, London and the South East have seen their budgets rise by £235m in the same period.

Leader of Leeds City Council Councillor Keith Wakefield said:

“People are now beginning to see the real impact of these cuts, with the gap between affluent and lesser well-off areas broadening, and especially between the north and south where the divide seems to be getting much wider not narrower.”

The national spending review also confirmed additional funding for the ongoing effect of previous council tax freezes as well as giving authorities the option to freeze their council taxes for a further two years, with a grant equivalent to a one per cent increase being offered in both 2014-15 and 2015-16. Any council wishing to raise council tax by more than two per cent in either year rather than accept the freeze grant will need to carry out a local referendum on the issue.

The New Homes Bonus which encourages local authorities to build new houses is also to be top-sliced to fund a new Single Local Growth Fund, with Leeds expected to be £1m a year worse off as a result. The one per cent cap on increases to public sector pay will also remain in place until at least March 2016.

The Local Government Yorkshire and Humber (LGYH) partnership last month expressed its concern that the impact of freezing council tax, the New Homes Bonus and the new system of business rate collections for local councils also benefitted more affluent areas due to higher-value housing markets and stronger local economies.

Leeds City Council is currently analysing the full detail of the national spending review and what it means for its budgets, with a further report to be produced in September.

Councillor Wakefield added:

“We are currently looking through the figures but we already know the outcome is going to be even more painful and difficult decisions ahead. People will rightly be asking questions about how budgets have actually been increasing in certain areas of the country while others have been asked to make massive savings with more to follow. That does not seem fair and I call on the government to look again at the real impact their austerity measures are having.”

Notes to editors:

For more information on the Special Interest Group of Metropolitan Authorities (SIGOMA) and to see their report ‘A Fair Future?’ released on June 11 2013, visit the website at www.sigoma.gov.uk/

To see the Local Government Yorkshire and Humber (LGYH) response to the national spending review last month go to http://bit.ly/18fCQM7


For media enquiries please contact:

Roger Boyde,

Leeds City Council press office,

Tel 0113 247 5472

Email: roger.boyde@leeds.gov.uk