‘Grim’ decisions need to be taken as cuts of £74m in government funding will be made by 2017, according to Leeds City Council (LCC) leader.
Today’s (December 9) budget proposals announced that LCC needs to tackle a further £46.7m reduction in government funding and £76.1m savings overall.
The council has already seen its levels of core funding from government reduced by £129m over the last four years, and an estimated further reduction of £74m over the next two financial years will mean by 2017 grant funding for Leeds will have been cut by more than 45 per cent overall in less than seven years.
LCC leader Coun Keith Wakefield (Lab) said: “I warned in October the budget for next year was going to be the toughest yet and the proposals being put forward are as brutal as I feared. Local authorities simply have nowhere else to go now but make the grim choices they have been avoiding for the last four years.
“Taking into account loss of grant funding and other factors, we have had to save £250m in Leeds alone since 2010, and as a region the loss of grant equates to £470m in that time – colossal amounts of money, and yet we continue to be asked to make more and more savings.
“We have tried as hard as possible to limit the impact on frontline services but it’s unavoidable that whatever we do now is going to be very painful so it is vitally important that people give us their views so we can find out their priorities.”
Next year’s cuts represent a 14.9 per cent decrease from this year, higher than the national average of 13.1 per cent and continuing the trend which has seen councils in the north hit by larger reductions than those in the south east, with the authorities in the Leeds City Region given a combined £470m less since 2010.
Since 2010, LCC has made significant changes, including full-time equivalent (fte) staff numbers cut by more than 2,000 by the end of 2014/15, spending almost £50m less on employees; saving about £30m through procurement and demand management; reduced buildings maintenance by £1m; reduced grant to third sector including 15 per cent to major arts organisations; and closures of seven residential homes, 12 day centres, 14 libraries, two leisure centres, two community centres, a one-stop centre, and three hostels.
This period has also seen increased income of £21m, increased income from council tax growth by £17.8m, and an earning of £13.6m from the new homes bonus.
The 2015/16 budget proposals for Leeds follow last week’s Autumn Statement, and public comments by the National Audit Office (NAO), Office of Budget Responsibility (OBR), and Institute for Fiscal Studies (IFS) warning that the ongoing austerity measures risk changing the nature of public services and the financial sustainability of local authorities, with the government being not fully aware of the impact such reductions are having.
Coun Wakefield said: “When such respected national bodies all come out with such similar dramatic comments the alarm bells should start ringing that these continuous funding cuts are simply not sustainable.
“The reality of the position is that it is not councils that should be facing bankruptcy, it is the existing Whitehall funding system which is clearly bankrupt. It is exceptionally disappointing that the Whitehall pay bill has actually risen by six per cent since 2010 whereas the local government pay bill has dropped by 12 per cent in that time. That is inherently unfair.
“In Leeds I am very proud of the fact that despite such tough economic conditions we have got on with things as best we can and remained ambitious as a city delivering major projects.
“The Autumn Statement offered very little by way of meaningful infrastructure projects for the north but we are firmly committed to doing everything we can to help create jobs and growth across the city ourselves.
“We have shown repeatedly what we can do so now is the time to decentralise the system so we have access to more resources and make decisions which we know will benefit people’s lives far more effectively than the Whitehall model ever could. The need for proper meaningful devolution and for actions to be delivered rather than just words and vague promises is now overwhelming.”
The proposals for 2015/16 include potential savings and changes to services in all areas of the council, but with a focus where possible on reducing the impact on frontline services and those for vulnerable children, young people and adults.
Among the proposals are council housing rent increases of 2.88 per cent, fees and charges across the council to increase by at least inflation, a six per cent reduction in roads maintenance, leisure centres, and council contact centres to operate reduced opening hours, nursery fees up 5.1 per cent, and grants to the third sector to be reduced including a 20 per cent drop for arts organisations.
No recommendation has been made yet on whether to freeze or increase council tax as the council is awaiting further information from the government on the issue.
LCC is to continue to get smaller, with a reduction of a further 475 fte staff by April 2016. The council will also look to make £23.4m savings next year through procurement contracts, as well as greater cross-council working and working with outside agencies to deliver services.
Potential new streams of income generation identified are through more public advertising and new temporary car parks. In addition, the proposals include £2.1m of savings from more efficient use of buildings.
Reviews of community centres are taking place, while changes will take place in children’s services and adult social care on how services will be provided. Additional funding has been found to deal with the significant demand pressures experienced in adult social care. In children’s services, an extra £500,000 is to be spent on support for children and young people at risk.
The budget proposals have been prepared based on the feedback from public consultation carried out since 2012, and will be discussed by the council’s executive board at its meeting at Civic Hall next week (Wednesday, December 17).
A period of consultation will then take place before the final budget is confirmed at the full council meeting in February.
The budget proposal report will be available from the afternoon of Tuesday 9 December at http://democracy.leeds.gov.uk/. Public consultation on the budget proposals will begin on December 17 through www.leeds.gov.uk/budget