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LEEDS City Council faces “unprecedented” budget cuts, as its spending is set to reduce by more than £100m next year, with hundreds of further job losses expected.
A report, set to go before the authority’s decision-making executive board next week, shows the authority faces an estimated budget gap of £166m over the next five years, of which £118.8m relates to 2021/22.
The document adds that just over half of this has resulted from the ongoing financial impact of Covid-19.
So far, the council has identified £32m of savings for next year, but this would still leave a funding gap of more than £86m, about which the council is expected to make further announcements later this year.
This is all in addition to a funding gap of £52m the council currently faces for the rest of the 2020/21 financial year, due to extra pressures from Covid-19.
The leader of Leeds City Council has since said the authority was in talks with the government on whether further help could be offered to Leeds.
The report said: “In response to this financial position, the council has carried out a review of its capital programme and established a ‘Financial Challenge’ programme of service reviews to identify savings that will contribute towards closing the estimated budget gap and enable the authority to present a robust, balanced budget position in 2021/22.
“These aim to protect services that support the most vulnerable whilst ensuring that the council becomes more financially resilient and sustainable for the future.”
It added the reviews had so far identified £32.3m potential savings, which is likely to see a loss of 478.4 full-time equivalent staff.
“The results of any such consultation with staff, trade unions, service users and the public will be used to inform the final decision.”
If approved, the proposed cuts would reduce the estimated budget gap for 2021/22 to £86.2m. Further reports are expected to be brought to the council’s executive board in October and November in order to identify proposals to further close the budget gap to enable a balanced budget in 2021/22.
“The updated position, including any further Government announcements, will be reported to this Board in December.”
It added that, while the reviews are ongoing, all “non-essential” capital spend would be placed on hold, with the exception of health and safety and Covid-19-related works, as well as schemes that are partially finished.
The report concluded: “The council faces an unprecedented financial challenge with an estimated budget gap for 2021/22 of £118.76m.
“In response, the authority has carried out a review of its capital programme and established a ‘Financial Challenge’ programme of service reviews to identify savings that will contribute towards closing the estimated budget gap and enable the authority to present a robust, balanced budget position in 2021/22.
“These aim to protect services that support the most vulnerable whilst ensuring that the organisation becomes more financially resilient and sustainable for the future.
“Work continues to identify further savings with proposals to come to this Board in October and November.
“Meaningful consultation will be carried out with staff, trade unions, service users and the public on proposals as required with the results used to inform the decisions taken in respect of Service Reviews.”
Leader of Leeds City Council Judith Blake said: “In what has been an extremely difficult decade for local authorities, we have proved here in Leeds that we are a prudent, financially well run council.
“The impact of coronavirus has had an enormous impact on our financial position. Not only in terms of the costs to tackle Covid-19, but on many of our revenue streams that help provide the funding we need to fund vital front-line services.
“While welcoming the assistance offered so far by government to meet the costs of coronavirus, it simply does not go far enough when you also consider the significant cuts made to our central grant funding since 2010.
“We are therefore in talks with the government to discuss what else they can do to help because without additional assistance, there is a threat of big cuts to services.
“These financial reports to executive board set out the stark financial position we face, and a number of steps we intend to move forward with to mitigate the impact of the budget gap in the next financial year. We will do everything in our power to ensure that our front-line services supporting the elderly, vulnerable and all those in need continue to be protected.”
The report will go before Leeds City Council executive board members on Thursday, September 24.
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