The Leader of Leeds City Council has warned of “brutal” decisions ahead and reinforced the need for greater devolution as the council faces £70 million of further government funding reductions over the next two years.
A strategy report to be discussed by the executive board at Civic Hall on Wednesday October 15 will outline the continued financial challenges facing the council, with £46m less central funding next year followed by a projected further reduction of £23.4m the year after.
The council has already seen its levels of core funding from government reduced by £129m over the last four years and by 2017 based on the projected figures it will mean the grant funding for Leeds will have been cut by 45 per cent overall in less than seven years.
The figure for Leeds for next year represents a 14.7 per cent reduction of funding from this year, higher than the national average of 13.1 per cent and continuing the trend which has seen councils in the north hit by larger reductions than those in the south east.
Leader of Leeds City Council Coun Keith Wakefield said: “Over the last four years the north has taken a massive hit compared with councils in the south east and even though it has meant making some incredibly difficult decisions we have managed the situation as best we can.
“Now though unless something changes I am very concerned we run the risk of putting vulnerable people into real hardship. The decisions we are facing next year are brutal – that’s the only word for it and there’s no point sugar-coating it. The relatively straightforward choices have already been made so now we are left with the really unpalatable ones.
“As a city we are now at the point of drawing a line in the sand in terms of our finances – we must be given more financial freedom to make our own decisions and shape our own destiny in order to try and help people.”
The strategy for addressing the funding reductions will see all areas of the council continuing to reduce budgets, but where possible frontline services and those for vulnerable children, young people and adults will be protected.
The policy of ‘civic enterprise’ will continue with the council becoming smaller in size but bigger in influence, encouraging economic growth and working with business, communities and the third-sector to develop new ideas and ways of working and to deliver services in the best way possible.
Reiterating the need for greater financial devolution, Coun Wakefield added: “Despite a period of national austerity and huge difficulty when it comes to local authority funding, the Leeds economy has proven resilient and we have remained ambitious, delivering major infrastructure projects such as an award-winning new arena, plus the biggest new shopping centre to open anywhere in Europe last year in Trinity Leeds and another to follow with Victoria Gate.
“We are in the process of finalising our Core Strategy with a commitment to building 70,000 new houses and driving on job creation and economic growth. And the Tour de France Grand Départ this summer with Leeds City Council at the forefront showcased our abilities and the Yorkshire region in the finest way possible.
“We have shown what we can do and that is despite being held back by an existing government funding system and restrictions which are acting as a handbrake on our economic and growth potential. Currently around 95 per cent of decisions about public spending in Leeds are made by people in Whitehall who have little or no knowledge or understanding of this city and what we need. If national politicians really want to unlock the potential of the north as they say they do then they must act now to release these financial shackles.
“When a system becomes broken and outdated it needs to be changed, so something new is needed and that must be greater fiscal control and decision-making over resources and services by councils and city regions for the benefit of all as soon as possible.”
Leeds City Council’s detailed budget proposals for 2015-16 will be presented for consultation in December before being finalised by full council in February.