Leeds council budget deficit: Six areas where money is being lost as £20m shortfall puts budgets under pressure

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Leeds City Council is facing a deficit of more than £20m, amid the economic crisis engulfing the UK.

As reported over the last month, the council has already scrapped its Bonfire Night displays, frozen almost all recruitment and stopped paid overtime as it tightens the purse strings.

A gap of around £16m, to be bridged over the next six months, was forecast in September – but this figure has since risen by around £4m.

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Local authorities across the country are in similarly dire straits, with spiralling energy costs and inflation having gobbled up bank balances. The number of vulnerable adults and children they have to look after, which generally consumes more than half of all council spending, has also risen.

Vacant units at Kirkgate Market and outdoor trading places around the city are proving costly for the council. Picture: James HardistyVacant units at Kirkgate Market and outdoor trading places around the city are proving costly for the council. Picture: James Hardisty
Vacant units at Kirkgate Market and outdoor trading places around the city are proving costly for the council. Picture: James Hardisty

Although by no means an exhaustive list, here’s a rundown of several other areas where the council is losing cash – and why.


Vacant units at Leeds’ Kirkgate Market and outdoor trading places around the city are costing the council around £700,000 in lost rent. Traders have been hit particularly badly by the coronavirus pandemic and changing shopping habits in recent years, while bus and train strikes have hit footfall across the city centre this summer.

In addition, the council says its losing around £300,000 from extras including city centre advertising income as businesses are forced to trim their own budgets.

Council house voids and repairs

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The council owns and is responsible for maintaining around 54,000 homes across Leeds, but the pandemic has resulted in many lying empty for months at a time, despite a huge waiting list for properties.

There are a number of factors behind this, with Covid blamed for a backlog in repairs and ensuring homes are fit to live in before a new tenant moves in. This is linked to a shortage of skilled workers in the construction industry, while the rising cost of labour and parts is also hitting the public purse.

However, it was reported in June that some council properties in Leeds’ leafier outskirts, like Otley, are going begging because those on the waiting list do not want to live there, or the property does not meet their needs. A lack of public transport connectivity has been cited as a factor behind that, as has being away from friends and family.

By contrast, demand for a house is huge in other areas. It was reported last year how more than 900 people had competed to move into a council home in the Halton Moor area of east Leeds.

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The council says it has lost out on £2m because of empty council homes this year, although the unexpected extra cost of repairs, because of higher prices, is likely to be covered by cash held in reserves.

Council tax collection

After government grants, council tax is the biggest source of revenue for local authorities. But with the cost-of-living crisis biting, more and more households are finding they are simply unable to pay it.

The council has confirmed that by the end of August this year it had collected less in tax than it had at the same point in 2021. As a result, it’s dropped its collection “target rate”, from 99 per cent of all money it is owed to 98.5 per cent.

At first glance this appears a tiny drop, but in reality, that equates to millions of pounds, given the population of the city is around 800,000.

Leisure centres and swimming pools

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Swimming pools are among the biggest guzzlers of energy given the quantities of heating and lighting needed to run them. Leisure centres and gyms too require lots of electricity to keep equipment going.

Active Leeds, the arm of the council that runs 17 venues, 13 gyms and 14 pools across the city, is down by about £850,000 on where it needs to be, according to the latest accounts. The council says that income from memberships and swimming is below the levels it wants, though it says this is subject a “degree of variability” across the year and will be “closely monitored” over the next few months.

In short, things could pick up here, as gyms tend to get busier in January and February.


Bin lorries, gritters, school minibuses and taxis taking children to school have all been hit by rising prices at the pump. The price of petrol rose by 36 per cent in the 12 months up to June 2022, while diesel increased by 40 per cent.

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Fuel has got slightly cheaper in the time since, but the council says it did not account for any increases in petrol and diesel when it set its budget in March this year. Given most of its vehicles provide essential services, the extra money will have to be found from somewhere.


The council runs 29 nurseries across Leeds under the name Little Owls. Collectively these are £1.5m over budget. This is predominantly because of staff shortages and problems recruiting, which have resulted in the council cutting back on opening hours.

But another issue is that the number of kids attending nurseries is still not back up to pre-Covid levels, as more parents work from home or find alternative childcare arrangements.