Second year of expected significant extra funding “makes a massive difference” as Leeds City Council releases initial 2026/2027 budget proposals

The Leader of Leeds City Council Councillor James Lewis has welcomed more government funding as budget proposals for 2026/27 include a below-inflation increase to the council element of council tax.

Initial budget plans released today feature an increase in the council’s net budget of £70.4million made up of £43.5m more from the government and £26.9m from local funding streams, as the council looks to again deliver a balanced budget in the context of rising demand and costs in particular in caring for vulnerable children and older people in Leeds.

The proposed budget ensures the council can continue to deliver and improve everyday services including maintaining free garden bin collections, glass recycling in green bins, cracking down on flytipping and filling in potholes. 

The proposals, to be considered by the council’s executive board at a meeting at Civic Hall next week (Wednesday 17 December), detail the continued scale of the financial challenge facing the authority next year.

After taking account of the extra funding together with efficiencies and savings already agreed across the council, the plans outlined today detail a range of further proposed measures to deliver the remaining £39.5m needed to achieve the required balanced budget.

These plans include adopting and utilising new technologies and ways of working, and a focus with partners on the benefits of preventative work with vulnerable children, families and older people to keep them out of care services and together in a home environment wherever possible and appropriate.

The budget proposals include a below-inflation 2.99 per cent increase to the Leeds City Council element of council tax, with an additional two per cent added to support adult social care costs. For a band D property in Leeds the increase equates to £90 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.

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.

It also reflects the new Council Plan, which aims to reset and reshape the authority for the future through organisational effectiveness, driving growth and increased revenue, focusing on supporting people to stay out of care services 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 proposals include providing resilience to the council’s long-term financial position by returning £29.9m to its reserves, which have fallen significantly in recent years as they were used to support frontline services.

The extra government funding through the national Fairer Funding Review follows on from a net budget increase of £33.7million for Leeds last year, the first such significant increase since 2010.

The government is also set to support local councils when it comes to their financial planning with a switch from single year to multi-year funding agreements, with further details expected later this month.

Leader of Leeds City Council Councillor James Lewis said:

“This is the second year of expected significant extra funding which will make a massive difference for Leeds as without it the challenge to deliver a balanced budget was looking bleak. We will have to keep on facing the challenge of providing frontline services, looking after people in our care and running an efficient organisation, but this extra money along with the confidence of a multi-year agreement means no return to austerity and will help us hugely when it comes to our financial planning.

“In Leeds we think it is right to focus on doing everything we can to protect our most vulnerable young and older people, but we have also chosen to invest in areas we know people want and need, such as keeping garden waste collections free and offering household glass recycling collections, as well as improving our road and transport network, tackling potholes and prosecuting flytippers to help keep our communities clean and attractive.

“As a council we are also firmly committed to continuing to modernise and adapt, with a smaller footprint on the city but with a strengthened approach to working with partners, communities and residents to deliver the new Leeds Ambitions for everyone in the city to benefit from. This is very much a ‘Team Leeds’ ethos, which is something we are very proud of and will continue to shape everything we do into next year and beyond.”

The council’s commitment to supporting children and families and older people is shown by 64 per cent of the council’s overall expenditure being invested in those areas for next year.

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 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 3,607 fewer staff than it did in 2010/11.

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.

If approved by the executive board, the initial budget proposals for 2026/27 will go out for consultation with the public and stakeholders in the coming weeks before the final set of proposals are considered at executive board and then full council at the annual budget debate in February 2026.

The initial budget reports can be seen at Council and democracy (agenda item 11).

For more information on Leeds Ambitions go to https://leedsambitions.co.uk/ and for further details on the new Council Plan go to Council and democracy (agenda item 10).

ENDS

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