City council says local government funding is ‘broken’ as it looks to save £60m

The leader of Leeds City Council wants “urgent” action to be taken to support local council services, as the council sets out to save nearly £60m in its 2024/25 budget.

Councillor James Lewis said there must be fundamental change to how local government’s vital services are funded.

He warned: “Councils are under massive pressure to deliver savings and support an increasing number of vulnerable people in need while also keeping up good levels of day-to-day services such as collecting waste and fixing the roads.

“What’s becoming ever more apparent is that the system of local government funding is fundamentally broken.”

He has repeatedly called for the Government’s Fair Funding Review to be implemented, and a switch to more of a needs-based approach when deciding how council funding is allocated.

Cllr Lewis said replacing the current one-year funding agreements with multi-year settlements would offer greater stability by helping local authorities with their financial planning.

He said if the results of the Fair Funding Review which began in 2016 were applied, Leeds would be better off by an estimated £45.3m next year.

He said: “Core government funding for Leeds is now less than half the level it was in 2010/11, being £197.8m for this year compared to £450m then, which means that since 2010 over £2.5bn cumulatively has been taken away from frontline local council services provided by Leeds City Council.”

Latest figures for Leeds show a projected overspend of £33.9m for the current financial year caused by the continued impact of rising costs and demands on services.

Initial council estimates have identified the need for a further £59.2m worth of savings to be delivered in next year’s budget for 2024/25.

This is down to increased energy and fuel costs, high levels of inflation and rising costs and demand for services especially for children in care, adult social care, together with a nationally-agreed pay increase for staff all contributing to the shortfall.

Leeds City Council says it is carrying out service and asset reviews along with freezes on recruitment including on agency staff and overtime, as well as on non-essential spending except where necessary for health and safety or statutory reasons.

In terms of its overall size, the council now has about 3,500 fewer staff than it did in 2011.

The latest budget position in Leeds will be considered by senior councillors at the meeting of its executive board at Civic Hall on 20 September