Huge budget pressures have led Leeds City Council to again accept the government’s offer of adding 2% to council tax to contribute to the spiralling costs of caring for rising numbers of older people.
A total council tax rise of 3.99% in Leeds for the coming year is proposed as the council deals with severe spending challenges that mean it needs to find a further £75.3 million of additional income and savings by March 2018.
Local councils across the country have been lobbying for extra cash to cope with the burgeoning costs of adult social care services, but none was forthcoming when the Chancellor’s Autumn Statement was made.
For the second year the government has said that councils can levy an extra 2% to be used entirely for adult social care on top of the maximum 1.99% council tax rise. Leeds City Council is planning to take up this offer in its annual initial budget proposals for 2017-18 and a council tax rise of 3.99% is proposed.
The 2% extra adult social care precept would raise an extra £5.4 million in 2017/18, which is only a small proportion of the overall cost of looking after the city’s most vulnerable people. This coming financial year the council is proposing investing 67% of its entire £492.4m net revenue budget in adults’ and children’s services – a rise of 2.3% on last year.
This is against a backdrop of continuing reductions in the council’s core funding from government. This will mean a further cut of £25m next year on top of £214m already cut since 2010. These budget reductions come alongside big increases in demand for services. This means that by the end of March next year the council will have had to reduce spending and increase income to meet a £400m gap.
To achieve this the council has been consistently introducing efficiencies, managing staff reductions, reviewing its assets and introducing ways of raising income. This year a further 800 jobs will have to go, on top of the 2,500 that have already saved £55m a year since 2010. The council will continue to work with unions to achieve these as far as possible without compulsory redundancies, using its voluntary leavers’ scheme and the redeployment of staff where appropriate.
Councillor Judith Blake, Leader of Leeds City Council said:
“Leeds has undoubtedly become a more efficient, enterprising and forward thinking council since 2010, which means we have been able to protect many council services effectively.
“However the fact demand for services continues to grow significantly places a huge amount of pressure on what is now a much reduced budget. This means it’s becoming very difficult for council services to address the severe challenges caused by poverty in some of the more deprived areas of the city.
“We will continue to prioritise the money the council does have in supporting the most vulnerable in the city. But without a radical change in the national approach to funding local authorities the significant impact needed on deep-rooted problems associated with inner city poverty is now very hard indeed to deliver.”
Service and policy reviews and the search for efficiencies continue on a rolling basis. This budget will focus on proposed efficiency savings which total £24.9m in 2017/18.
They focus on reviewing how the council works, continuing to manage service pressures through investment in prevention and early intervention, particularly in adults and children’s services; savings across support service functions; savings from staff recruitment and retention management, along with reviewing savings that can be achieved at leadership and management level; making savings by limiting and reducing non-essential budgets along with ongoing procurement and purchasing savings.
It was agreed earlier this year 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 that means a 3% rise, with some services having bigger charges levied.
Meanwhile, work to raise as much cash as possible for public coffers continues and the council projects that trading its services– an approach it has now followed for a number of years- will this year realise an extra £8.9m.
Projects such as expanding the city’s South Bank and investing in East Leeds Extension and the Thorpe Park development, along with transport innovations and working to facilitate the HS2 train link coming to Leeds all help to deliver the growth ambitions.
A copy of the budget report can be found on the Leeds City Council website here (opens as a pdf): Initial budget proposals for 2017-18
It will be presented to the council’s executive board for their views on December 14, after which public consultation on the proposals will begin. The proposals will then be brought back with the public feedback to the February 2017 executive board meeting before the final budget goes to full council to decide whether to accept it on February 22.
The council’s approach to efficiency is based on an organisational change programme which has delivered a variety of savings including:
• Staff reductions of 2,500 since 2010 without compulsory redundancy – saving £55m pa.
• £2.4m savings from changes in terms and conditions of staff;
• Over 50% reduction in agency staff since 2013;
• Over £35m of procurement savings since 2010/11;
• Asset review – getting the most from the assets we own and investing in new assets where it makes financial sense, saving over £4m since 2013/14;
• An annual saving in the cost of waste disposal of approximately £7m following the completion of the Recycling and Energy Recovery plant in 2015.
• Innovative use of the balance sheet to generate £35m savings in 2015/16; and
• More effective working with city partners to maximise the impact of the ‘Leeds Pound’, encouraging local money to be invested locally.