Council tax rise on table as council sets budget for 2014/15

After three years of freezing council tax in the face of heavy cuts Leeds City Council is having to recommend raising it by 1.99% along with a 5.9% rise in council house rents as it has to make a further £50m in savings.

As the council enters a fourth year of severe cuts to its funding it can no longer afford a council tax freeze and is also planning to lose up to 200 jobs next year. This is on top of over 1,800 that have gone in the past three years, including 25% of senior manager posts.

The council tax rise would represent an increase of 43p a week for a Band D household. Government grant reductions alone have taken £94m out of the council’s budget over the past three years, and this government funding is being further cut by over 10% in the coming year.

In addition, the government’s planned changes to the rent-setting formula will mean rents having to go up by 5.9% to balance a loss in income to the council of £3.5m from 2015 and £6.5m the following year in order to protect services to tenants.

This is set against a national backdrop that shows that by 2017-18, funds for local government in Yorkshire will have been cut by the equivalent of about £502 per person, compared to £352 per head in London and just £256 per head in the wider South East.*

A more direct comparison detailed in the council’s budget report demonstrates that the cuts in funding to Leeds over the past few years now mean it has nearly the same spending power per household (£1,851) as Wokingham (£1,837)- the third richest district in the UK.

Heavy pressures on services- particularly for those caring for vulnerable people- and other losses in funding mean that in setting a budget of £565.736m the council has to save nearly £50m this year.

This is despite enormous efforts over the past few years to run council services ever more efficiently on increasingly-tight budgets. Further efficiency savings have been identified for the coming year, including £5.4 million in procurement, on top of £25m already saved in this area over the past few years. A further £5.5m is expected to be saved from an ongoing review of back-office functions, along with a saving of £0.8m in the council’s insurance charges, including a move to bring the handling of claims in-house.

Additional income of £6.6m will be generated through fee increases and the council increasing trading its services to other bodies.

Councillor Keith Wakefield, leader of Leeds City Council, said:

“The past three years of sustained cuts to our budgets have been incredibly hard and it becomes more and more challenging to make increasingly-painful decisions. Yet we have managed, through enormous effort, responsible financial management and great determination to continue to deliver high-quality, good value-for-money public services as efficiently as possible. While developing a leaner, more efficient council, it becomes increasingly difficult to find further savings. We have to face the hard facts to keep the city financially healthy and reluctantly raise council tax and rents.

“Vulnerable people continue to be our most important priority- as supported by our public consultation- and we are prioritising what limited resources we do have into adults’ and children’s social services. We have also developed a concerted anti-poverty strategy, re-aligning our services to allow easy access to help, advice and direct support to those in danger of slipping into financial difficulties. While warning of the dangers of pay day lenders we also put people in touch with credit unions, prioritise housing needs and guide them on clear routes into sustainable work.”

Main areas of investment are adult social care, where £4.3m has been identified to address increasing demand on services, along with £4.5m for children in care, aligned with work to avoid them having to be looked after in the first place. A further £2.5m is being invested into children’s support services.

The city’s 57 children’s centres have been protected through successful efforts to achieve £1.6m in efficiencies in how they are run. Meanwhile, better working together with other agencies has resulted in £2.2m being saved as people are supported in staying in their own homes for longer.

The council’s customer services section is receiving another £214k to help deal with a 30% rise in calls to council tax and benefits advice lines. There will be a further roll-out of alternate weekly bin collections to increase recycling and reduce landfill tax, saving £1.2m.

Councillor Wakefield continued:

“While dealing with our budget challenges we also have to think ahead to ensure that Leeds continues to develop and that we have the skilled workforce to support it. We will continue to lobby for funding to re-balance disparities between regions, along with devolution of more powers from Whitehall to enable us to further influence growth.

“Forging future opportunity by intensifying efforts to attract jobs and investment continues apace and after the recent successful openings of the city’s arena and the Trinity shopping centre we look forward to the continues progress of schemes such as the imaginative Kirkstall Forge and Victoria Gate and the spectacle of hosting one of the world’s greatest sporting events, The Tour de France, as it sets off from our city.

“As for our future as the city’s main service provider, next year will see an even greater financial challenge with our government grant being cut by nearly £46m, more than 14%. We cannot continue to do more for less indefinitely, but we will take a firm leadership role in ensuring that these services are provided local people receive the best possible outcomes.”

The budget recommendations will be presented to Leeds City Council’s executive board on 14 February, before being considered by a meeting of the full council on 26 February.

Notes to editors: *Statistics from SIGOMA (Special Interest Group of Municipal Authorities), a body that acts as the collective voice of urban areas representing most of the large towns and cities in the Northern, Midland and South Coast regions of England http://www.sigoma.gov.uk

For media enquiries please contact:

Donna Cox, Leeds City Council press office, 0113- 224 3335

Email donna.cox@leeds.gov.uk