Leeds Council’s £30m debt repayments should be money going to local services, claims opposition councillor

Leeds City Council is now paying the price for its leaders’ “financial profligacy”, according to one of the authority’s most senior members.

By Richard Beecham
Friday, 10th December 2021, 11:55 am

Leader of the authority’s Conservatives group Coun Andrew Carter has claimed the soaring costs of the council’s debt repayment – expected to increase by £30m next year – are the result of “totally self-inflicted” financial decisions made by the authority.

But Leeds City Council’s leadership has hit back, claiming the authority had to change its borrowing levels due to £2bn worth of cuts from central government over the past decade, and that the Tories never came up with any alternative plan at the time.

It follows the publication of the authority’s draft 2022/23 budget, which predicted a budget increase of more than £80m, but added that rising costs will still mean having to make £20m of cuts.

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The leader of Leeds City Council's Conservatives group, Councillor Andrew Carter, has claimed the soaring costs of the council’s debt repayment are "totally self-inflicted"

Meanwhile it predicts the cost of servicing its debts – known as minimum revenue provision – will jump by £30.4m.

Coun Carter said: “We will consider the administration’s budget proposals in detail over the days and weeks ahead, and in due course put forward our own proposals for where we would do things differently.

“But one thing is clear from this report. The administration’s financial profligacy has come home to roost, and the bad decisions on borrowing made by the current leader Coun Lewis, and his predecessor, have now left the council in a position where their debt repayments are causing the cuts they’re having to make.

“A £30m increase in debt repayments next year is £30m that won’t be spent in this city on the services that matter to local people. This position is self-inflicted, but the people of Leeds are paying the price for the administration’s financial mismanagement.”

The council's leadership has hit back, claiming the authority had to change its borrowing levels due to £2bn worth of cuts from central government

An increase in the amount of money raised via council tax and business rates, along with an extra Government grant, looks set to raise council spending power in 2022/23 by £86.2m, and could result in an increase of more than 100 jobs.

But Leeds City Council still has to find an extra £20m worth of cuts in the coming months, while another council tax increase, of just under two per cent. This is due to increasing costs – the biggest of which is the council’s debt spending.

A report by Leeds City Council officers stated: “This proposed budget provides for a £30.4m increase in the cost of debt.

“Changes approved at full council in 2017 to previous years’ Minimum Revenue Provision Policy (MRP), based on the fact that MRP had been overprovided for between 2008/09 and 2014/15, enabled the Council to benefit from reduced MRP payments for the three years 2017/18 to 2019/20. However from 2020/21 this position started to unwind.”

Responding to Coun Carter, Leeds City council deputy leader Coun Debra Coupar (Lab) said: “I wonder if Coun Carter has been on the wine and cheese at one of these Conservative Christmas parties because he’s forgotten the main reason the council changed its borrowing levels is because his Government has cut over £2bn and counting from council services in Leeds.

“The change to borrowing levels was first agreed in 2016 to help protect front line services for vulnerable adults and children. At that time no alternative plan was put forward by Coun Carter, so it really is a bit rich for him to criticise it now.

“Borrowing is used to fund investment in front line council services that the people of Leeds need and deserve. This includes investment in services for vulnerable children and adults, as well as everyday public services that residents need and rely on.

“Despite massive cuts from the government to their funding towards the council our budget proposals see investment in waste services and social care through recruiting more staff.”

Leeds City Council’s Executive Board, on which both Coun Coupar and Coun Carter sit, will meet to discuss the paper on Wednesday, December 15.

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