31 Jan 2023

Leeds City Council Leader continues call for change to national funding model as final 2023/24 budget released

Council budget Finance

The Leader of Leeds City Council has reiterated his call for urgent changes to how local authorities are funded after final budget proposals to deliver £58.6million savings in the next financial year were published today.

Council Leader Councillor James Lewis called for the immediate implementation of the government’s Fair Funding Review and a switch to more of a needs-based approach when deciding how funding is allocated.

The final budget proposals for 2023/24 will be discussed at a meeting of the council’s executive board at Civic Hall on Wednesday 8 February before being debated and voted on at the full council meeting on Wednesday 22 February.

The 2023/24 budget includes a council tax increase of 2.99 per cent for core council tax and two per cent which the government requires be dedicated for adult social care funding. Council tax in Leeds remains the second-lowest of all the comparable core cities in England.

Rising energy costs, high levels of inflation and increasing costs and demand for services especially in children’s services and for adult social care, along with a nationally-agreed pay increase for staff have contributed to the shortfall which needs to be addressed by the council to balance its budget next year.

The impact of the current levels of inflation and rising energy prices has resulted in an additional combined cost of £31million to the council, despite it reducing its own use of gas and electricity by 24 per cent since 2018/19.

Having initially been announced in December, the proposals have since been consulted upon with the public, councillors, unions, business representatives, third sector groups and other stakeholders.

Leader of Leeds City Council Councillor James Lewis said:

“The position for Leeds in terms of our funding and finances remains incredibly challenging, with a continuous need to make savings which is simply not sustainable.

“If the government applied the results of its own Fair Funding Review which began in 2016, Leeds would be better off by more than £45million a year, yet we are still waiting for it to be implemented with no explanation as to why.

“The recent Levelling Up bidding process is another good example of why the current over-centralised funding decision-making model doesn’t work. Having local authorities and areas competing against each other for funding with no real explanation of how the decisions were reached in Whitehall cannot be fair or right.

“Funding should be allocated on a needs-first basis, reflecting the country as it is in 2023 not using outdated formulas from a previous era. We know people in Leeds are struggling with everyone being affected by the cost of living crisis. We are doing everything we can to help, especially those most vulnerable in our communities, but we are not being helped by this outdated approach to funding and will continue to call for it to change.”

Leeds City Council was formally praised last year for how it operates following a peer-to-peer review carried out by the Local Government Association. Among its findings the review recognised the council’s finances for being well-managed, while the collaborative ‘Team Leeds’ approach as part of the Best City ambition was also highlighted as a strength.

To address the £58.6million shortfall, the council has identified savings, efficiencies, new ways of working, greater partnership working and use of existing resources to balance its budget.

The council remains committed to delivering frontline services as effectively as possible, tackling poverty and inequality and improving the quality of life for everyone in Leeds through a focus on three pillars of inclusive growth, health and wellbeing and zero carbon.

The final budget proposals being put forward for 2023/24 include reviewing areas of children’s services to contribute to safely reducing the need for children to become looked after and a review of children’s centres. A review will also be undertaken as to the future of the Little Owls nurseries across the city. Further savings have been identified using more automation and dimming of streetlights when traffic flows are lower.

Consideration had also been given to introducing parking charges at major parks and some community parks in the city. After taking public consultation into account a decision has been made to not to progress this as a possible option, however the council may need to look at other income options in the future due to continuing budget pressures.

The council is also expecting to need to make further savings in 2024/25 and 2025/26 and whilst the government has not confirmed its spending intentions for this period, the council has commenced a process to identify efficiencies so that the projected budget gaps can be managed in a way that ensures its budget remains robust, resilient and sustainable.

In terms of council staffing levels, the 2023/24 budget includes a net reduction of 11.4 full-time equivalent (FTE) posts. The council remains committed to doing everything it can to avoid, reduce and mitigate compulsory redundancies through voluntary measures such as natural turnover, flexible working, reviewing and reducing agency and overtime spend and continuing the positive consultation and joint working with trade unions.

Overall, the council has reduced in size by approximately 3,700 people between 2011 and December 2022. It continues to be a Real Living Wage employer, with the basic wage level increasing to £10.90 per hour, remaining above the National Living Wage which rises to £10.42 per hour in April. The proposed budget also provides for paying the Real Living Wage on commissioned services within Adult Social Care. The nationally-agreed pay award for council staff in 2022/23 equates to a 10.5 per cent rise for the lowest paid staff.

To see the final annual budget report and supporting information, go to https://democracy.leeds.gov.uk/mgA.aspx?M=11826&LLL=0 (agenda item 11).


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