Leeds City Council leaders are having to contemplate various additional measures, including substantial staff reductions, closures of buildings, and selling assets, as the latest steps in an ongoing major budget challenge.

During the meeting of the council’s executive board at the Civic Hall on Wednesday 18th October, several reports will be deliberated concerning the current financial position and the years ahead, along with options for addressing the challenge.

Despite setting a balanced budget in February, the council is contending with additional in-year pressures, resulting in an overspend of £29.6 million for the current fiscal year. This mirrors issues experienced nationally due to escalating costs and heightened demand for services, particularly for children in care, those with special care and educational requirements, as well as for adult social care. This is coupled with an unfunded nationally agreed pay rise for council employees.

All services have submitted proposals to achieve these savings, but the need for further economies will persist over the next three years, with an estimated funding shortfall of £162.8 million until the end of March 2027, of which £59.2 million pertains to the following fiscal year, 2024/25.

To meet this challenge and adhere to the legal duty of delivering balanced budgets annually, the council will continue to conduct ongoing service and asset evaluations, implement freezes on recruitment, and curtail non-essential expenditures except where necessary for health and safety or statutory reasons.

Nonetheless, more substantial measures will be required. Consequently, the council has today issued a formal Section 188 notice to engage in consultations with trade unions to avoid, diminish, and mitigate the potential repercussions of compulsory redundancies. The council aims to reduce its workforce by up to 750 full-time equivalent positions by the close of the 2024/25 fiscal year. This will be managed through various methods, including natural staff turnover, flexible retirement, and voluntary departure schemes, with compulsory redundancies as a last resort. Presently, the council employs approximately 3,500 fewer staff than it did in 2011.

As part of the ongoing service and asset reviews, the council continuously evaluates the properties it owns and oversees throughout the city. On average, about 10 buildings are relinquished each year, and in line with this process, four more are now being considered for potential closure by year-end due to low occupancy rates and escalating maintenance costs. These are located at Adams Court, 15 Lavender Walk, Broomhill Family Centre, and Foxcroft Close. If these closures go ahead, the affected staff and the services they provide will be relocated.

Additionally, there is contemplation of selling four more assets currently leased out to operators and owned by the council. These are Swinegate Car Park, Harper Street Car Park, St George House, and 2180 Century Way at Thorpe Park. If sold, these assets would generate significant funds for the council to help alleviate the financial challenge.

Leader of Leeds City Council Councillor James Lewis said; “The proposals announced today are us being upfront and clear with everyone about the scale of the challenge we and councils all over the country are facing. After responding to austerity for the last 13 years we have now reached the stage where we need to look at every option no matter how unpalatable, which sadly includes the possibility of compulsory redundancies as well as building closures, asset sales and stopping or reducing some council services which will no doubt have an impact.

“Given the scale of the funding shortfall, we will be looking at every building in the council estate from the Civic Hall to local community facilities, to identify what can be disposed of while still providing services to the public.

“All areas of the council are doing everything possible to mitigate that impact with a focus on continuing to provide frontline and essential services that people rely on in every community and support our most vulnerable residents, but it’s clear as with councils all over the country we cannot meet these financial challenges alone. The government needs to address this crisis in local government finance as a matter of urgency now.”

To see the reports the executive board will be discussing go to Council and democracy (leeds.gov.uk) (agenda items 13-15).