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Explained: Areas where Leeds council is losing money

By David Spereall, local democracy reporter

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.

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A gap of around £16m, to be bridged over the next six months, was forecast in September.

But this figures has since been hiked by around £4m.

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.

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

Markets

Vacant units at Leeds’ Kirkgate Market and outdoor trading places around the city, such as Pudsey Market, are costing the council around £700,000 in lost rent.

Traders have been hit particularly badly by Covid 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 

The council owns and is responsible for maintaining round 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 don’t want to live there, or the property doesn’t 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, in other areas demand for a house is huge. 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.

The council says it’s 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’re 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’s 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.

armley leisure centre
Armley Leisure Centre.

Leisure centres and swimming pools

Swimming pools – like the ones in Armley, Kirkstall and Pudsey – are among the biggest guzzlers of energy given the quantities of heating and lighting needed to run them.

Leisure centres and gyms require lots of electricity to keep equipment going, with estimates suggesting a £200,000 shortfall on energy bills this winter.

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.

Fuel

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.

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.

Childcare

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.

WLD cutswatch

West Leeds Dispatch‘s Cutswatch series has been following council cuts here.

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