Finalised budget proposals will go to Leeds City Council’s executive board next week as the council continues to balance reductions in funding with ever-increasing demands on services.
Since initial plans were published in December, the council has been told its funding from government under the provisional local government finance settlement has been reduced by £14.1m, as anticipated.
However, factors such as nationally-negotiated staff pay awards proposals and a successful bid to keep 100% of business rates have now been factored in and the budget has been revised to reflect these changes.
Meanwhile, in a bold move to use local authority expertise to spend less and find new sources of income, there is a new plan to take on around 100 new staff in Leeds Building Services to do work that previously would have been done by external contractors. The expansion would increase overall numbers of council staff by 59, since they are reducing elsewhere, in the coming year.
Other similar innovations in catering, schools support and other council in-house services also operate. Some of them trade their skills outside, to help offset shrinking budgets.
Overall, the council’s net revenue budget – how much it needs for the coming year – has been set at £510.9m, up by £18.2m from last year. Supporting adults’ and children’s services will account for 63.4% of this spending.
Excluding any increase in precepts for fire and police services, a proposed council tax rise of 4.99% is planned, comprising an increase in standard council tax of 2.99% with a further 2% adult social care precept.
The amended proposals take into account the confirmation that the government accepted the application from the Leeds City Region business rates pool, of which the council is a member, to keep 100% of business rates in return for forgoing revenue support grant cash. This will be on a one-year pilot basis.
Meanwhile, a combination of reduced core funding and cost pressures means that the council will also have to find £33.9m of savings by March 2019. Overall it will have seen its budgets in recent years shrink by £267m by 2020.
Leeds City Council Leader Councillor Judith Blake said: “After many years of doing everything within our power to make our budget balance in the face of sustained reductions to funding we have reached a point where further efficiencies are hard to find.
“We are absolutely committed to protecting frontline services, particularly for the growing numbers of vulnerable people who need our care most. To balance those burgeoning costs, we continue to look at ways to make the most of our limited funds and the investment in staff for Leeds Building Services is a great example of that.
“While we welcome the opportunity to invest all income from business rates locally we do need longer-term certainty to enable us to gain the greatest benefit through a proper planned approach to that investment.”
Executive board meets on February 7. The budget proposals will be considered alongside other connected reports including the capital programme, which outlines how the council intends to assemble £1,472.3m of funding from its own and other sources to invest in the local economy.
Also tabled will be the treasury management plan and the Best Council plan, which is the annual outline of how the council intends to focus on priorities and achieve its ambitions.
A copy of the budget report can be found on the Leeds City Council website here Revenue Budget Proposals and Capital Programme 2018 19 (scroll to Item 19 on the side menu). Leeds City Council’s full council will meet on February 21 to vote on whether to accept the proposals.
Variations from the initial proposals include:
- An additional £8.9m net gain in resources as a result of Leeds City Council’s successful bid for 100% business rate retention.
- Providing an additional £4.9m to fund the additional cost of the national pay award offer.
- The adoption of the Living Wage Foundation’s recommended minimum hourly rate at a cost of £0.2m. This will see a rise for Leeds City Council employees from the current minimum rate of £8.25/hour to £8.75/hour.
- An additional £1m has been provided for the looked after children budget. This means that compared to 2017/18, the 2018/19 budget provides an additional £4m to deal with this demand pressure.
- Council tax will go up by 4.99% as set out in the initial budget proposals. However the mix will change with proposed core council tax increasing from 1.99% in the initial budget proposals to 2.99% whilst the adult social care precept will decrease from 3% in to 2%.
- Over 80% of the council’s tenants will see a reduction in their payments in 2018/2019 and where there are increases these will be capped at £5 per week per tenancy.
- Dwelling rents for tenants in PFI areas will increase by 3%. This is a 1% reduction from the assumed increase included in the council’s initial budget proposals.
- Planning fees have increased by 20%.
- The initial proposals stated there would be a reduction of 53 full-time equivalent staff in the coming year. This is now predicted to be an increase of 59. This is due to the planned recruitment of more planning staff and an increase in the number of staff within Leeds Building Services to support the planned increase of turnover.