Council continues efficiencies to tackle budget gap

Budget Proposals 2017-18
In order to meet the funding gap, all areas of the council will be asked to make savings and efficiencies, although services for vulnerable young and older people will continue to be prioritised with funding in these two areas accounting for 67% of the council’s proposed budget for 2017/18.

Ever-increasing demand for adult social care services has led Leeds City Council to again propose adding an extra 3% to council tax to help with the hugely burgeoning cost of care.

The council is proposing a tightly-managed budget for 2018/19 aimed at maximising efficiencies while coping with reductions to funding in the face of rising pressures on services.

It is planning to again accept the government’s offer of adding 3% to council tax to contribute to the spiralling costs of caring for the growing number of older people. In the 85-89 age group alone, a 1.87% rise in numbers is expected to cost an extra £0.8m in the coming year.

The 3% precept would raise £8.6 million, itself only a small part of the estimated £208m to cover the costs of adult social care and health in the coming year. This is a significant chunk of the council’s overall spending, much of which is prioritised to support vulnerable children and adults.

Providing largely statutory services for children and adults will use up 65.1% of the council’s total net revenue budget of £506.2m in 2018/19.

A total council tax rise of 4.99% in Leeds for the coming year is proposed as the council deals with continued challenges that mean it needs to find a further £38.2 million of additional income and savings by March 2019. This is in addition to coping with total reductions in the council’s core funding of around £239m from 2010 up to the 2017/18 budget.

The final budget plans may be amended as the Leeds City Region Business Rates Pool, of which the council is a member, is waiting to hear if its application to be a pilot for a 100% business rates retention scheme has been successful. The government is expected to announce sometime this month which areas will trial the system.

Meanwhile the council continues to constantly review services and operations to make them as efficient as possible and targeted at those most in need. Putting resources into more preventative approaches has delivered successes such as reducing numbers of people in temporary accommodation.

In Leeds none of the 33 people currently placed by the council in temporary accommodation are housed in bed and breakfast facilities. This means there is no extra cost to the council, compared to the calculated £9m Birmingham has to spend on placing 379 of its 1,740 people in temporary accommodation in bed and breakfasts.

One area where the council has freed up some money to make a positive investment is the proposal to expand its brown bin garden waste collection service. It plans to extend the popular service to cover the remaining 45,000 homes in the city suitable for collection by introducing an extra three collection routes with an investment of around £360k.

Councillor Judith Blake, Leader of Leeds City Council, said: “It has been an extremely difficult period of sustained and significant reductions to our funding since 2010. Our approach has always been to tackle this head-on with a combination of intelligent efficiencies and service and resource reviews that prioritise those most in need.

“Alongside this we are absolutely determined to drive Leeds forward as a place of opportunity for all, where sustainable development helps us address our inequalities as a city.

“To achieve all this we have focused our efforts and our increasingly-limited resources where they can make the greatest difference and delivered some real results that have improved lives. However, our ability to do this is increasingly compromised as our funding continues to shrink and the pressures on our much-needed services grow.”

Further efficiency savings of £22.2m are proposed this year across all the council’s directorates. Services will continue to be reviewed on how efficient and effective they are, as will leadership and management.

The focus on early intervention investment, particularly in adults’ and children’s social care services, along with ongoing procurement and purchasing savings, will also continue.

It was estimated in July that a further 415 full-time equivalent jobs would have to be lost by 2020. The 2018/19 budget proposals have revised this estimate down to a net reduction of 53 full time equivalent posts. The council will continue to work closely with unions to achieve these as far as possible without compulsory redundancies, using its voluntary leavers’ scheme and the redeployment of staff where appropriate.

Last year it was agreed to accept the council’s scrutiny board recommendation that fees for subsidised council services would be reviewed annually and should go up by at least the rate of inflation. This year will see the same rise as last year of 3%.

Work on income generation continues as further ways to raise money by trading the council’s services, an approach it has followed for a number of years, is ongoing. This is expected to raise £1.5m this year.

Rents will again reduce by 1% for the majority of the council’s social housing tenants in accordance with the government’s requirements. However it is proposed that tenants benefiting from PFI funded investment in their properties and surrounding environment will see their rents increase by 4%.

Proposed increases in social housing service charges, such as cleaning of communal areas in multi-storey flats, reflect more closely the costs associated with those services. Taking account of the proposals for rent and service charges, 82% of tenants will be paying less per week in 2018/19 when compared to 2017/18.

It is not anticipated that any cash will need to be used from the council’s reserves, which will remain at £18.6m. A KPMG external audit this year concluded: “The authority have demonstrated that they have managed the level of reserves effectively in recent years, despite the budgetary pressures they face. Overall we consider the authority to have adequate arrangements in place regarding the management of its financial risks and potential impact on resource deployment.”

The existing capital programme for the period 2017/18 to 2020/21 includes investment plans which total £1.2bn, funded in a variety of ways including grants and borrowing. This enables the funding of major projects and schemes and is continually reviewed. An updated capital programme report will be presented to February’s executive board.

A copy of the budget report can be found on the Leeds City Council website here: Budget proposals 

It will be presented to the council’s executive board for their views on December 13, after which public consultation on the proposals will begin. It will also go to the council’s scrutiny board for consideration and review and the budget plans will be brought back with feedback to executive board before the final budget goes to full council to decide whether to accept it on February 21.