Councilor James Lewis, the leader of Leeds City Council, has expressed approval of the new funding allocated to the city, following the release of the final budget plans for 2025/26, which include an additional £67 million for the next year.
Despite this boost, the council is still faced with substantial financial challenges due to escalating costs, increasing demands for services, particularly for looked-after children and adult social care, necessitating a total saving of £103.8 million to achieve a legally-mandated balanced budget for the upcoming financial year.
The budget also outlines a council tax increase of 4.99 percent, with 1.99 percent of this specifically allocated to cover adult social care expenses. For residents in a band D property, this will result in an annual increase of £86.29, equating to about £1.66 per week. Notably, Leeds had the lowest council tax rate among all major core cities in England during the 2024/25 fiscal year.
The latest budget plans update the preliminary figures presented in December, with revisions made possible by recent government funding announcements. Originally, the council had already identified and approved savings of £23.8 million as part of its medium-term financial strategy, which left an additional requirement of £80 million in savings to be found. The implementation of further proposals initially put forward in October and December will secure these necessary savings, ensuring the council can present a balanced budget for 2025/26 as legally required.
In response to feedback from public and stakeholder consultations on the initial budget proposals, the council has made several decisions. Notably, it has confirmed that Abbey House Museum will remain open. Additionally, the council is reconsidering its approach to bowling green provisions in the city. Further consultation will explore potential methods for increasing revenue and reducing the number of proposed site closures, reflecting the council’s responsiveness to community input and concerns.
The additional £67 million in funding that Leeds will receive in the next financial year has enabled the council to avert a proposed 10 percent cut in funding for neighbourhood networks in Leeds. Furthermore, there will be no reductions in funding for wellbeing and youth activities. Like many councils nationwide, Leeds is contending with significantly increased costs for providing services, compounded by a rising demand, particularly in the realm of social care for vulnerable children and adults.
This increase is particularly evident in the support needed for looked-after children, especially those with high levels of need who require costly external placements, as well as for adult social care, where there is an increased demand among older people, adults with learning difficulties, and individuals requiring mental health support.
Reflecting the council’s commitment to its most vulnerable citizens, 60 percent of the council’s 2025/26 budget will be allocated to services for children and families, and adults and health, underscoring its dedication to supporting both the young and the elderly in the community.
Over the past four years in Leeds, the costs for external residential care for children have surged by 75 percent, escalating from £68 million to £119 million. The average expense for an external residential placement has increased by 45 percent since the 2021/22 fiscal year, now standing at £6,300 per week, or £340,000 annually per child. For children with particularly complex needs, the costs can reach up to £1 million per year for each child.
In the realm of adult social care, there has been a 20 percent increase in the number of working-age adults and older people receiving support over the last three years, with the demand budget for these services rising by £100 million during the same period. Faced with these challenges, Leeds City Council is actively pursuing innovative and creative strategies to effectively and efficiently meet the needs of its residents.
In its children’s services, Leeds City Council is committed to achieving ambitious outcomes for the young people under its care. The council is investing in innovative approaches like small group living homes, which enable children to move back from expensive external placements to Leeds. This proximity to their families, friends, and local communities not only reduces costs but also supports better social outcomes.
Further investments have been made in a reunification service, which facilitates the return of children from external residential placements to their immediate or extended family in Leeds, when it is safe and suitable. This approach is supported by evidence indicating that such reunifications are likely to lead to improved outcomes for the children involved.
Additionally, the council is dedicated to enhancing its fostering services and maintaining strong, positive relationships with foster carers. It is also focused on developing new models of accommodation, including supported and specialist housing, to cater to children with the most complex needs.
Leeds City Council’s Home First programme, in collaboration with NHS and care partners, is significantly impacting adult social care across the city. This initiative focuses on providing a variety of short-term support services designed to assist individuals in returning to their homes after hospital discharge or to prevent hospital admissions altogether. The goal is to enhance recovery and promote greater independence for those in need.
In its initial 18 months, the Home First programme has proven highly effective, resulting in 1,200 fewer adults needing hospital admission as they were able to receive care at home or within community settings. Additionally, for those who were hospitalized, the programme has successfully reduced the average length of stay by 17 percent. As a result, over 400 individuals were able to return directly to their homes post-hospitalization, bypassing the need for an intermediate community care setting.
In response to its budget deficit, Leeds City Council is conducting thorough assessments and reviews of all its assets and services to identify potential cost-saving measures. The finalized budget plans outline several strategic changes and reviews across various areas to help achieve the necessary financial savings:
- A review of transport services within the adults and health sector.
- The establishment of a new early intervention team aimed at helping older people continue living independently at home.
- A comprehensive review of children’s centres.
- A review of transport services for children and families.
- Leasing Middleton Leisure Centre to an external party to manage operations.
- ‘Pay as you Feel’ admission charge at Leeds City Museum, Leeds Art Gallery, and Leeds Discovery Centre.
- ‘Pay as you Feel’ admission model at Kirkstall Abbey specifically for Leeds residents.
- A review of the Leeds Cultural Investment Programme to evaluate its effectiveness and efficiency.
- A study into the potential reduction of the number of community committees in Leeds to streamline operations.
- A review of the council’s print and sign functions to identify cost-saving opportunities.
These measures are part of the council’s broader strategy to manage its financial situation effectively while continuing to deliver essential services to the community.
Today’s budget announcements from the council include plans to reduce staffing levels by 234.8 full-time equivalent (FTE) positions over the next year, reflecting a significant decrease of 3,545 staff compared to the 2010/11 figures. Despite these reductions, the council is dedicated to working closely with trade unions to minimize the impact on employees and mitigate the need for compulsory redundancies. However, given the magnitude of the budget challenges for the 2025/26 fiscal year, it may become necessary to consider compulsory redundancies.
In a move to support its lower-paid staff, starting from April 1, the council has committed to raising the minimum hourly wage to £12.69, which is nine pence higher than the Real Living Wage of £12.60 per hour. This decision underscores the council’s ongoing commitment to fair compensation for its workforce amidst financial constraints.
Leader of Leeds City Council Councillor James Lewis said:
“For the first time in 15 years the council has received additional government funding that has allowed us to protect services for our most vulnerable residents, which will always be our top priority. This has also given us more flexibility to act on feedback received from the consultation on our initial budget proposals and I’m pleased to confirm this has enabled us to make changes, including reversing the reduction of funding for the neighbourhood networks. I am also pleased to confirm our support to low-paid workers by continuing our commitment to paying all council employees at least the Real Living Wage rate.
“While significant ongoing challenges are still there to deliver over £100million of savings in a single year, we know that innovative new ways of delivering council services in a cost-effective way will give us the best chance of balancing our budget moving forward. For instance in adult social care our HomeFirst service helps more people safely continue living at home rather than going into care; and in children’s services we are increasing capacity in fostering and small group living homes which is beneficial to children and helps reduce spend on expensive private sector external residential placements.
“We also thank and appreciate the responses of everyone who gave us their views on the budget plans and specific elements within it. We have listened, discussed the issues involved and responded with a clear emphasis on working together as ‘Team Leeds’ to find effective solutions and new ways of working, which will underpin everything we do in the year ahead as we try to deliver this budget.”
Looking ahead, Leeds City Council anticipates the need for additional savings of £38.2 million in 2026/27 and £30.1 million in 2027/28, though these estimates will continue to be subject to review. The council’s executive board is scheduled to review the final budget plans for 2025/26 at Civic Hall on Wednesday, 12 February. These plans will then progress to the annual budget debate and vote, which will be conducted by the full council on Wednesday, 26 February.
For those interested in reviewing the details, the final budget reports are available under agenda item 12 on the Council and Democracy section of the council’s website www.democracy.leeds.gov.uk
