200 jobs could go at council after £85m budget gap revealed

A second East Midlands council has warned of mass job cuts because of a looming budget deficit in the space of just days this week.

Tory-led Leicestershire County Council says it may have to cut 200 jobs over the next four years as it considers how to deliver services differently in an effort to plug a budget gap that top £85m by 2028.

The authority’s four-year proposals include investing £127m more to meet growing demand, mainly in social care, and an extra £113m to cover inflation and the National Living Wage increase.

A 3% Council Tax increase is planned for next year, in a move which will bring in £11m. A further £7m will be raised from a 2% increase in the adult social care precept.

The council says that “spiralling” social care prices, growing service demand and inflation means it will use up to £12m of reserves to help balance the books next year – the first time is has been forced to dip into its emergency coffers.

The news comes after Nottingham City Council revealed a £50m black hole in its budget for next year – with Government commissioners on the verge of stepping in.

Declan Keegan, the Leicestershire County Council’s Director of Corporate Resource, said: “Councils are facing their toughest ever budget challenge. Although we are not in crisis, we have to tackle the 20% gap between expenditure and income, so need to deliver services differently.

“Supporting vulnerable people remains our priority. And with costs and demand rocketing, it’s crucial we continue to transform how we work whilst also getting people the help they need.

“We’re low funded, very efficient and high performing. But the Government’s autumn statement was dire for councils, with no extra funding and the national living wage increase alone adding £20m to our costs.

“From stepping up finance controls, to making sure we’re not subsidising other organisations’ services, we’re doing everything we can to bring down our significant budget gap. Using our reserves to help make ends meet is clearly not sustainable.”

Closing the budget gap may lead to a reduction of about 200 posts over the next four years – staff turnover and vacancy management will mean that the number of compulsory redundancies will be “much lower”, says the council

The plan will be discussed by the council’s cabinet on Tuesday (19 December)