Cost of living emergency inflicts £20.4m budget shortfall on city council

Leeds City Council says it is taking action to address an “unexpected” £20.4m budget shortfall caused by soaring national costs.

Measures include freezes on recruitment and non-essential spending.

An updated report on the council’s financial position will be considered by senior councillors on the executive board at its meeting at Civic Hall next week – 19 October.

The report details how unexpected significant rises in inflation and energy costs this year which have triggered a cost of living crisis nationally are impacting on the council’s in-year budget position.

The council is now freezing recruitment – including on agency staff and overtime – as well as non-essential spend, except where this is necessary for health and safety or statutory reasons.

All areas of the council have been asked to identify areas for potential additional savings. When these are taken into account, the deficit reduces to a sum of £17.98m remaining to be found in this financial year.

Deputy leader of Leeds City Council and executive member for resources, Councillor Debra Coupar, said: “We all know the cost of living crisis is now dominating the national news with people getting really worried about how they are going to pay their bills and make ends meet.

“The council is committed to doing everything we can working with our partners to help people as much as possible, but the rising costs are also causing a further significant impact on council services and has resulted in this additional budget shortfall we weren’t expecting.

“We have taken immediate action to start addressing this and we are looking at all options to try and find a solution but the position is really challenging and there is no easy answer.”

Leeds City Council was already working to realise savings for the year of £16.5m, with a further shortfall expected to be needed to be addressed in its 2023/24 budget.