Leeds City Council has published an update on its five-year medium term financial strategy, outlining the “severe difficulties” it faces to deliver balanced budgets in the face of the “continued need to make significant savings.”
The report explains how the council “needs to find £273.7 million in further savings over the next five financial years.”
The local authority said the further savings follow on from the council having had to deliver savings totalling £794.1 million from 2010 to the end of the current 2024-25 financial year.
The council said: “Leeds and all councils across the country are facing extreme financial challenges as a result of significantly increased costs to provide services and rising demand, especially for vulnerable young people and adults.
“This is being seen in supporting looked after children, especially the most vulnerable with high levels of need requiring costly external placements, as well as for adult social care with increases in demand for older people, adults with learning difficulties and those needing support with mental health.”
Leeds City Council Deputy Leader and executive member for resources Councillor Debra Coupar said: “It is not an overstatement to say that this is the most challenging financial period so far facing local authorities, following on from more than a decade of needing to make major savings year on year.
“Over the last four years alone six councils have issued section 114 notices, in effect declaring that they cannot achieve a balanced budget, and a survey from the Local Government Association at the end of last year indicated that as many as one in five thought it was likely or very likely that they would have to do the same before the end of the next financial year.
“Following fifteen years of sustained reductions in local government funding, we are now reaching a stage where councils simply cannot continue to balance their budgets in the face of escalating demand for some of the most costly services for our most vulnerable adults and children.
“In Leeds the reductions equate to a real-terms decrease in funding of £465.9m or 70 per cent over those fifteen years.
“Whilst we’ve made significant savings already of £730.2 million, including reducing the council’s workforce by nearly a fifth, we need to find a further £63.9 million of savings this year and then in addition to that over £273 million more across the next five years. It is an incredibly difficult situation.”
Council tax in Leeds remains the second-lowest of the eight core cities in England.
“Whilst funding from council tax and business rates in recent years has increased, these have been outweighed by reductions in funding from the government grant alongside increases in pay, service delivery prices, the impact of the cost of living and demand pressures,” said the council.