Final budget plans focused on improving essential and everyday services announced by Leeds City Council for 2026/27

Leeds City Council has confirmed its final budget plans for the next financial year, with a focus on improving essential and day-to-day services residents rely on.

The budget reports published today show significant additional government funding for Leeds for a second year, and will be considered by the council’s executive board next week (February 11) before being debated and voted on at the full council meeting at Civic Hall on Wednesday 25 February.

As a result of the government’s Fair Funding Review, resources for Leeds have increased by £71.1m for next year. The budget for 2026/27 sees the return to a three-year settlement for local authorities in a change to the previous one-year settlements, with the final confirmation of government funding levels to come this month. This change offers local authorities more certainty and stability over their funding position, enabling more detailed financial planning over the known three-year period.

The budget plans focus on the council delivering and improving services to support vulnerable residents and families, as well as providing everyday services such as free bin and recycling collections, road maintenance and tackling potholes as well as cracking down on flytipping in Leeds communities.

Underpinning the council’s budget planning are the key principles of the four Leeds Ambitions around health and wellbeing, inclusive growth, supporting communities to thrive and for the city to be sustainable and resilient, tackling poverty and inequality.

It also reflects the new Council Plan, which aims to reset and reshape the authority for the future through four interlinked themes: organisational effectiveness and resilience, driving growth and increased revenue, reducing demand in social care and social housing through a cross-council approach to prevention, and locality working with partners and communities to secure and deliver investment and improvements.

Part of that reshaping has seen the council working to reduce its estate and footprint in the city in recent years, aiming to have fewer, better quality and better used buildings. This programme has seen more than 120 buildings released, generating over £28m in capital receipts and more than £9m in cost savings.

The budget includes a 4.99 per cent increase to council tax, of which two per cent is dedicated to support adult social care costs. For a band D property in Leeds the increase equates to £90.61 for the year or £1.74 extra per week. Council tax in Leeds is currently the second lowest of the comparable English core cities, and similarly second lowest of the West Yorkshire districts.

A measure of the council’s commitment to supporting vulnerable residents is seen in 67 per cent of the council’s net budget for next year being for children and families and adults and health.

Reflecting national trends on pressures in these areas, the budget commits an additional £54.6million to support care services in Leeds for people of all ages. Similarly, in response to rising costs and demand for temporary accommodation, the budget also includes additional funding of £12.4m in this area.

Given the changes in demand and population trends especially for social care the overall impact across the council will require savings of £46.6million next year to achieve a balanced budget, and in many areas the organisation will be smaller in size but more modern and efficient.

In terms of bin collections, the budget allocates an additional £8m for waste services, enabling the council to maintain free garden waste collections and recycling including glass via the green bin. The council has also announced a trial to begin the collection of food waste in the brown bin. For more information on that see https://news.leeds.gov.uk/news/leeds-city-council-clarifies-position-on-bin-collections-as-new-brown-bin-food-collection-trial-announced. 

The council was recently highlighted by the government for its work on highways maintenance, with an additional £13million of capital funding invested on roads in Leeds and tackling potholes each year, although a significant backlog of works of approximately £300m remains.

The budget also includes providing resilience to the council’s long-term financial position by returning £49.6m to its reserves next year, and by £55.3m by 2030/31.

The year 2026 also sees a significant milestone for Leeds, with it being 400 years since the city received its first Royal Charter. A year-long celebration of events and activities is underway working with all communities across the city. For more details visit https://www.leeds.gov.uk/campaign/leeds-400. 

Leader of Leeds City Council Councillor James Lewis said:

“We are very pleased to have not only significant additional funding for a second year but also the stability around knowing our financial position for the next three years, which makes a big difference to planning how best to make use of our available resources to support people in Leeds and make their lives better and easier.

“We are committed to doing everything we can to help our most vulnerable residents, but also on improving and delivering the everyday services people expect and rely on such as free bin collections, supporting recycling, tackling potholes and combatting flytipping.

“The council and its staff have worked incredibly hard since 2010 to make significant savings every year, and while that challenge continues we look forward to developing the city with confidence in the coming years, through our Team Leeds approach to working with everyone in all communities to make Leeds the best city it can be and a great place to work, live and visit.”

The impact of efforts to tackle poverty and inequality in Leeds can be seen in the latest national Index of Multiple Deprivation. In 2015, Leeds had 16 areas of the city in the lowest one per cent of neighbourhoods nationally. In 2019 that number had fallen to 12 areas, and in the latest 2025 rankings it is now just seven.

In terms of council staffing, the budget plans announced today include only a modest change, reflecting the council’s approach to reshaping the organisation and its positive work with trade unions to avoid, reduce and mitigate the need for compulsory redundancies. The council currently has 3,623 fewer staff than it did in 2010/11, and a review of senior staffing levels across the organisation is ongoing.

As part of its commitment to supporting lower-paid staff, from April 1 the council will pay the increased Real Living Wage of 13.45 per hour.

With this being the first of a three-year funding settlement from the government, the provisional figures for the following years show a funding gap of £51m for 2027/28 and £60.9m for 2028/29 for Leeds, although these numbers are subject to change.

The budget reports for 2026/27 published today can be seen at Council and democracy (agenda item 16).

For more information on Leeds Ambitions go to https://www.leedsambitions.co.uk/ and for further details on the new Council Plan go to Council and democracy (agenda item 15).

ENDS

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Tel: 0113 378 6007