Further funding cuts and cost pressures shape Leeds budget plans for 2019-20
Continued rising demand on adult social care services and a further cut to its funding from government has seen Leeds City Council today propose a council tax rise of 3.99 per cent as part of its budget plans for next year.
In a report to be considered by the council’s executive board at Civic Hall on Wednesday 19 December, the initial budget proposals for 2019/20 outline how the council intends to realise a further £24.3million of savings needed next year as a result of reduced core funding and rising cost pressures.
Subject to any changes as a result of the final Local Government Finance Settlement which is still to be confirmed, Leeds is expecting its core government funding level to continue to be reduced by another £15.3m next year, a 7.7 per cent annual reduction.
Next year is the last of a four-year funding settlement agreement between Leeds and the government, and if the expected figures are finalised it would mean the council’s core funding from the government will have been cut by approximately £266m between 2010 and 2020, a 59 per cent cut overall in that period.
Added to the cuts in central funding are rising local demands on services and increasing cost pressures, resulting in the authority needing to save £24.3m overall next year.
In order to support and protect essential frontline services the council is proposing a 2.99 per cent rise in council tax, added to by an additional 1 per cent precept to support the rising pressures on adult social care services, with the numbers of people in Leeds aged 85-89 expected to rise by a further 2.9 per cent in the coming year. This means that without the additional police and fire service elements of council tax, for a property in Band D in Leeds council tax will increase next year by £1.02 a week from £25.70 to £26.72.
In keeping with its Best City ambition and commitment to being a compassionate city with a strong economy offering inclusive growth and opportunities for all, the council aims to continue meeting the financial challenge by being efficient and enterprising.
This approach includes continuing to support and stimulate growth, with Leeds having the most diverse economy of all the UK’s main employment centres and creating new private sector jobs at the fastest rate of any UK city in recent years.
It also focuses on increasing traded income opportunities, continuing to modernise as an organisation and generating efficiencies and managing demand for services, especially through investment in prevention and early intervention measures in adult social care and children’s and family services. Reflecting the focus on protecting the most vulnerable young and older people in the city, together these two service areas will account for 63.1per cent of the council’s overall budget for 2019/2020.
The impact of funding changes and the growing importance of the role council tax plays in council funding can be seen in the fact in 2010/11 for every pound of council tax received in Leeds the government added a further £1.15. For next year, for every pound of council tax received there is no similar support from the government and instead the council is required to use income from business rates to support its budget.
Reflecting on the proposals, the Leader of Leeds City Council Councillor Judith Blake said:
“We are facing another very difficult and challenging year ahead with our government funding being cut again and rising costs meaning we the need to make further significant savings. As an authority we will continue our policy of exploring all options and working with all our partners and our communities to not only protect frontline services and our most vulnerable residents, but also to do everything we can to tackle poverty and inequality in our city.
“Raising council tax is never a decision we take lightly, but due to the funding cuts it helps make an increasingly important contribution and is being stretched more and more each year to pay for frontline services. And with people living longer, we need the additional adult social care element to help provide people with the support and services they need.
“As a city the profile of Leeds has never been higher which should be a source of great pride, but we know not everyone is benefiting from that and we are committed to ensuring opportunities and growth are inclusive and open to all, but the difficulty should not be underestimated given how much less funding we are being given to work with each year.”
The budget proposals identify the council making savings of £16m next year through further efficiencies, including a reduction of a further 74 full-time-equivalent (FTE) staff over the year. The council aims to continue the same approach which has seen staffing levels reduced by 3,200 FTEs between 2010 and 2018, achieved without large-scale compulsory redundancies through natural turnover and its early leavers initiative, reducing agency spend and positive working relationships with trade unions.
The budget proposes for the council’s minimum wage rate to rise to £9.18 per hour – which is 18 pence above the Real Living wage rate, while housing rents except for those in PFI-funded homes will again be reduced by one per cent from April. Those in PFI homes will see their rents rise by 3.4 per cent, while there will be a rise of approximately three per cent generally in council fees and charges.
As part of the council’s commitment to ensuring the highest levels of fire safety in high-rise blocks, the budget provides funding for three new fire safety officers to increase the frequency of fire risk assessments, while improvements to sprinkler systems will continue to be delivered in 2019 and 2020.
In order to encourage empty homes in the city to be used, the budget proposes to double the council tax premium on properties unoccupied for more than two years from 50 to 100 per centre from April.
After being discussed by the executive board next week, the budget proposals will then be open for public consultation. All the views put forward will then be considered with the final budget plans returning to executive board in February before being debated and voted on at the full council meeting at Civic Hall on Wednesday 27 February 2019.
To see Leeds City Council’s initial budget proposals for 2019/20, go to https://bit.ly/2EceuIV (agenda item 18).
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