'Significant' extra funding to help cash-strapped Leeds City Council as 2026/27 budget plans announced
A “significant” boost of funding from central government is set to help Leeds City Council as the cash-strapped authority announces its budget proposals for next year.
Initial budget plans released today (Tuesday) feature an increase in the council’s net budget of £70.4million, consisting of £43.5m more from the government and £26.9m from local funding streams, as the council looks to deliver a balanced budget in the context of rising demand and costs in particular in caring for vulnerable children and older people in Leeds.
Recent years have seen the authority announce plans for redundancies and the closure of key community assets when budgets are announced, but today’s proposals feature no such features.
They do include a council tax hike of 5.99 per cent though, 2.99 per cent of which will go to the council and another two per cent of which will support adult social care services.
For a band D property in Leeds the increase equates to £90 for the year or £1.74 extra per week. Council tax in Leeds is currently the second lowest of the comparable English core cities, and similarly second lowest of the West Yorkshire districts.
The proposals will be considered by the council’s executive board at a meeting at Civic Hall next Wednesday (December 17).
Council leader, Councillor James Lewis, has welcomed the extra government funding for the budget, which will help as it continues to grapple with its financial challenges.
The council announced a recruitment freeze last month as its overspend for the year had hit £39.5m, largely due to the costs of adult social care and supporting young people who are at-risk.
After taking account of the extra funding together with savings already agreed across the council, the council says that today’s plans go some way to balancing the budget.
The plans include “adopting and utilising new technologies” and finding new ways of working with partners to emphasise the benefits of preventative work to keep vulnerable children, families and older people out of care services and together in a home environment wherever possible and appropriate.
The council says the plans are underpinned by the key principles of the four Leeds Ambitions around health and wellbeing, inclusive growth, supporting communities to thrive and for the city to be sustainable and resilient.
Income has also been generated in recent years through the council reducing its estate and footprint by having fewer buildings. This programme has seen more than 120 buildings released, generating over £28m in capital receipts and more than £9m in cost savings.
The budget proposals include providing resilience to the council’s long-term financial position by returning £29.9m to its reserves, which have fallen significantly in recent years as they were used to support frontline services.
The extra government funding through the national Fairer Funding Review follows on from a net budget increase of £33.7million for Leeds last year, the first such significant increase since 2010.
The government is also set to support local councils when it comes to their financial planning with a switch from single year to multi-year funding agreements, with further details expected later this month.
Leader of Leeds City Council Councillor James Lewis said: “This is the second year of expected significant extra funding which will make a massive difference for Leeds as without it the challenge to deliver a balanced budget was looking bleak.
“We will have to keep on facing the challenge of providing frontline services, looking after people in our care and running an efficient organisation, but this extra money along with the confidence of a multi-year agreement means no return to austerity and will help us hugely when it comes to our financial planning.
“In Leeds we think it is right to focus on doing everything we can to protect our most vulnerable young and older people, but we have also chosen to invest in areas we know people want and need, such as keeping garden waste collections free and offering household glass recycling collections, as well as improving our road and transport network, tackling potholes and prosecuting flytippers to help keep our communities clean and attractive.
“As a council we are also firmly committed to continuing to modernise and adapt, with a smaller footprint on the city but with a strengthened approach to working with partners, communities and residents to deliver the new Leeds Ambitions for everyone in the city to benefit from. This is very much a ‘Team Leeds’ ethos, which is something we are very proud of and will continue to shape everything we do into next year and beyond.”
64 per cent of the council’s overall expenditure is outlined to be invested in supporting children and families and older people next year.
In terms of council staffing, the budget plans announced today include only a “modest change”, as the council continues to reshape the organisation. The council currently has 3,607 fewer staff than it did in 2010/11.
From April 1 the council will pay the increased Real Living Wage for its lowest paid staff of £13.45 per hour.
If approved by the executive board, the initial budget proposals for 2026/27 will go out for consultation with the public and stakeholders in the coming weeks before the final set of proposals are considered at executive board and then full council at the annual budget debate in February 2026.