Leader concerned for the future of public services as Leeds City Council has to make £76m budget savings

The Leader of Leeds City Council has spoken of her concern for the future of public services in the face of another year of significant funding cuts to council budgets.

Council leader Councillor Judith Blake says the lack of investment by the government in comprehensive flood defences in 2011 shows the potential devastating impact of the under-resourcing of public services. Councillor Blake spoke as budget proposals to deliver savings of over £76million for 2016/17 were released today ahead of next week’s executive board meeting at the Civic Hall (Wednesday 10 February).

The budget report details the financial position for next year, which includes the council receiving approximately £35m less in core funding from the government – a figure £10m worse than was expected. In addition, the council is also facing a reduction of nearly £13m in the business rates it collects due to a high level of appeals being determined by the Valuation Office. Together with rising costs and demand for services, it leaves the council needing to find savings in excess of £76m next year.

Leader of Leeds City Council Councillor Judith Blake said:

“Sadly our great city is still dealing with the devastating impact and damage of the Boxing Day floods. We are now facing another major challenge in terms of how to handle the ongoing cuts to our funding which this year means we need to make savings of more than £76million.

“Having seen at first-hand the effect of the failure to fund the necessary level of flood defences the city needs, it is a real concern that far less money is available at a time when demand for public services is on the increase. As with the flood defence budgets, under-resourcing public services is a false economy that stores up problems for the future. The long-term need for services such as health and social care will only increase as preventative services, such as those funded through public health budgets, are drastically cut.

“We have seen in recent weeks council leaders from across the political divide, in all areas of the country, speak out against the effect of cuts on local government, which I think shows the cuts are now pushing services to their breaking point.

“Again Leeds has been hit harder than many other local authority areas and the national average. This cannot be fair, year after year. No-one should be under any illusions that this is going to be anything other than an incredibly difficult time for delivering much-needed public services. That said, as a council we will do all we can to minimise the effect of the cuts on vulnerable people. Our aim is for Leeds to remain a caring and compassionate city built on a strong economy focused on tackling inequality and promoting opportunity for all.”

The reduction of government funding continues the trend which has seen Leeds City Council receive more than £180m less in core funding, a drop of more than 40 per cent, since 2010. The reduction in core funding for Leeds for 2016/17 of 12.5 per cent is significantly higher than the 10.3 per cent average reduction for the other core cities, and using the government’s overall ‘spending power’ indicator, Leeds will be 3.6 per cent worse off next year compared to a loss of 2.8 per cent as the national average.

In public health funding, the council has already seen a reduction of £2.8m this year. The government has confirmed further cuts are to be made over the next five years, with the council estimating it will have £25m less to spend on public health priorities in Leeds.

In order to meet the funding gap, all areas of the council have been asked to make savings and efficiencies, although services for vulnerable young and older people will be prioritised with funding in these two areas accounting for approximately two-thirds of the council’s overall budget for 2016/17.

Council tax is proposed to rise in Leeds next year by 1.99 per cent, with an additional two per cent ‘precept’ as suggested by the government being used to provide support for essential adult social care services.

Social housing rents will reduce by one per cent next year in line with government policy, while there will be a general rise in council fees and charges of approximately three per cent in addition to specific increases in some areas.

The council itself will continue to get smaller in size, with a reduction in staff numbers of 299 full-time equivalent posts (ftes) next year as part of an expected loss of between 1,000 and 2,000 ftes by 2020. These will add to more than 2,500 full-time equivalent posts the council has reduced by since 2010, saving £55m a year as a result. The council will also continue to move to becoming a Real Living Wage employer, with a minimum £8.01 per hour rate paid to all staff from April 2016.

Proposals for further efficiencies and reductions will be examined across all services, while new and additional potential income streams will be explored and developed. These include the council adopting a more commercial approach with a focus on increasing income from trading services.

Given the council’s reducing size and financial position, it is keen to engage with all parts of the city as well as all groups and communities to discuss ideas and alternative ways of providing or supporting services which the council has previously delivered. This includes looking at opportunities around using new innovations and technologies.

Despite the ongoing challenges, the council is committed to continuing the ambitious economic approach that has helped the city create new private sector jobs at the fastest rate in the UK and attract major new investment from the likes of Burberry, Vastint and the Chinese Hualing Industry and Trade Group in Thorpe Park.

Major milestones in the coming months will be the much-anticipated opening of Victoria Gate and the completion of the Leeds Kirkgate Market refurbishment. The city will also be showcased to the world by hosting the Columbia Threadneedle World Triathlon Leeds and the Tour de Yorkshire, while work continues on developing the city’s bid to become European Capital of Culture 2023.

Councillor Blake added:

“When it comes to profile and being attractive to global investors, in economic terms Leeds as a city continues to go from strength to strength which is very pleasing, and we are committed to ensuring that growth develops in the years to come bringing with it more new jobs and apprenticeships. The difficulty is that with reduced budgets council tax and our other funding streams are being stretched more and more each year with our public health and social care budgets being particularly worrying.

“With the role of the council changing especially in terms of its size and resources, now is the right time to have conversations with all elements of the city about the best way forward for the future. The focus will be especially on how we can work more with partners and residents on new ways of achieving more effective results rather than simply providing services for people using the traditional methods, as in many cases that will no longer be possible.”

A public consultation exercise has been carried out on the budget proposals, which have also been considered by a range of stakeholders in the city including third sector groups and councillors on scrutiny boards.

Following the executive board meeting the council’s budget proposals for 2016/17 will be discussed and finalised at the meeting of full council on Wednesday 24 February. For more information visit www.leeds.gov.uk/budget

ENDS

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