Leeds council’s £150m Covid rescue cash pleas ‘unrealistic’ says senior tory councillor

Coun Andrew Carter, leader of Leeds City Council’s opposition Conservative group, made the comments in a meeting of senior decision-makers this week, adding the council did itself no favours with its own financial management.

It follows claims from Leeds City Council it needed an extra £150m from government in order to cover its extra costs and losses caused by Covid-19, or would have to make further cuts in an “emergency budget” in the autumn.

Speaking to a meeting of the council’s decision-making executive board, Coun Carter said: “We need a longer period of time to look at the effects Covid has had. To suddenly have to make reductions in spending in the short term does not necessarily deliver the right results.

“On the capital situation, I would like some reassurance that we have put a complete stop on any capital spending not financed by a revenue stream or from other grants.

He added that the council’s use of minimum revenue provision, in which a local authority manages some of its debts by setting aside the minimum amount of taxpayer cash to repay them, had not received the ‘close monitoring’ it needed.

Coun Carter said: “We are now asking the government to bail us out in full, which is unrealistic. We need to address the home-grown problems ourselves.”

Rules around council spending mean it is illegal for local authorities to run at a loss, and therefore have to balance their budgets within the financial year.

The council’s chief executive Tom Riordan said: “This is an unprecedented situation – the approach to the way Leeds runs its budget stretches back a number of years.

“We are in this unique position where we have a perfect storm of different challenges.

“The government support so far has been welcomed, but clearly we have a much bigger mountain to climb than that. From my conversations with people in Whitehall, it is an issue for the sector as a whole.

“I am hopeful we will get to a point early in the summer where we can stabilise our finances.”

Last month, the Local Government Association (LGA), which represents councils around the UK, claimed local authorities would need around £6bn in total to help cover the cost of Covid-19.

But leader of the council’s Liberal Democrats group Coun Stewart Golton called on the LGA to give the government a deadline, adding the continuing uncertainty around how much more government cash councils can expect is making it impossible for them to plan.

He said: “It’s crucial that we are singing from the same hymn sheet and putting the pressure on government.

“I would like to see leadership from the LGA to set a date on the demands that have been made. We can’t just hang on and hang on and wait for the government to eventually decide something in a budget at some point.

“There needs to be clarity and leadership from the secretary of state for local government.

“We need to look at how this council can deliver an economic renaissance.”

Coun James Lewis: “I do believe in terms of the council’s financial position, we have a strong record of setting a budget and sticking to it that other councils don’t have.

It was announced today that councils were expecting a so-called “mini-budget” in early July, which could provide further financial help to local authorities.

Council leader Judith Blake (Lab) told the meeting:”The next few weeks are critical – we look forward to getting an announcement from government.”