Leeds City Council facing up to financial challenges

Members of Leeds City Council’s executive board will next week consider how key services will be safeguarded in the light of the significant financial challenges the council is facing.

At the next meeting of the executive board on Wednesday 27 July, members will consider the level of further savings the council is faced with, as well as how the government’s four-year funding settlement offer would affect the council’s ongoing financial situation. The board will also hear potential implications on the council’s workforce, in order to ensure vital services can still be provided.

The leader of Council, councillor Judith Blake, is however hopeful the new Government may consider a change of direction in relation to deficit reduction and potential future funding for local Government.

As things stand, by the end of the current year Leeds’ core funding from the government will have been cut by around £214 million since 2010, which when added to increased demand-led pressures faced by the council will mean the council will have had to deliver a total saving of around £400m by March 2017.

In addition to a £34.2 million reduction to the council’s funding settlement for 2016/17 the government has previously indicated a further reduction of £53 million between 2017/18 and 2019/20.

Compounding the reductions in government funding there are other costs and funding pressures which need to be taken into account when drawing up the council’s financial strategy for the next four years. It is estimated at this time that the council will need to find savings in the order of £110m between April 2017 and the end of March 2020, of which £81m has to be found in 2017/18.

The scale of the funding gap means that it is increasingly difficult for the council to find further financial savings without major changes in what the council does and how it is done, which will have significant implications for the services provided directly by the council and those it commissions. This will mean that those services which are no longer an affordable use of public money will be delivered differently and in some cases may have to stop.

In order to meet the funding gap, all areas of the council have been asked to make savings and efficiencies, although the council remains committed to protecting front-line services, especially those which protect the vulnerable as well as those which are aimed at tackling poverties and reducing inequalities.

A key implication of the challenges facing the council due to the increased funding cuts from the government will be on its own workforce. Over the past six years the council has already had to make significant staffing reductions, but through managing the process carefully through normal staff turnover and a voluntary early leavers scheme, compulsory redundancies have been largely avoided. However in order to meet the very tight financial targets and ensure that key services are able to continue, the council can no longer be confident that compulsory redundancies can be avoided.

Members of the executive board will hear that between now and 2020 the council has identified it will need to reduce the size of the workforce by perhaps up to 2000 (fte) people. Wherever possible the council will still try to manage reductions voluntarily however if they become unavoidable any compulsory redundancies will be managed openly and fairly in line with the policies agreed with the trade unions.

There is no detailed indication at this stage of the exact number of redundancies that might be necessary, nor of exactly where in the council they would be needed, but those who are affected will receive all the necessary support and guidance to make the process as smooth as possible.

Councillor Judith Blake, leader of Leeds City Council said:

“We look forward with interest to what direction the new Government takes in the Autumn Statement in relation to deficit reduction and its impact on funding for vital public services. However, the current grant settlement as it stands means it will be incredibly difficult to continue to protect those services. That said, as a council we will do all we can to minimise the effect of the cuts on vulnerable people as well as on our own workforce.

“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. This remains a massive challenge given our projected financial position up to 2020, which is why were are in the process of reviewing our services and senior management arrangements, looking for ways to make income or reduce costs.”

The council is currently reviewing all services to see where potential savings can be identified and income generated, and also where reductions in the workforce could happen with the least impact on public services. This review will help inform the development of the medium-term financial strategy and whether or not to accept the government’s four-year financial settlement.

Councillor Blake added:

“All residents can also do their bit in their own homes and communities to help our city reduce the amount of public money we need to spend. For example, residents who look out for their relatives and neighbours can free up the demand on social services and those who make good use of our recycling services can help reduce the amount we have to spend on household waste disposal. By picking up litter in your local community less public money would be also needed for street cleansing.”

A more detailed report will be considered at the executive board meeting in September which will include consideration on whether or not to accept the government’s four-year funding settlement, which has been offered as part of a move to encourage more self-sufficiency in local government finances.

ENDS

For media enquiries, please contact:

Emma Whittell, Leeds City Council press office, on (0113) 2474713

Email: emma.whittell@leeds.gov.uk