Leeds council: Budget overspend worsens

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WLD cutswatch

By Don Mort, local democracy reporter

A multi-million pound overspend continues to grow as decisions loom over spending cuts to balance the council’s budget.

Leeds City Council will have to dig into reserves to break even this financial year, leading to further pressure on next year’s budget and beyond, councillors have been told.

A report to the executive board meeting on Wednesday (February 7) said the council was forecasting a general fund overspend of £39m, up from £35.3m in December.

Much of the financial shortfall is being caused by the rising cost of caring for vulnerable children in the city. Almost £60m must be slashed from the overall budget this financial year.

Deputy council leader Debra Coupar said measures were in place to reduce the overspend, but the use of reserves would be needed to balance the 2023/24 budget.

She said: “It should noted by executive board that this will impact on the resources available for 2024/25 and future years.”

Job losses, new parking charges and building closures are expected as part of wide-ranging budget measures at the authority. A council tax rise of 4.98 per cent has been proposed.

Coun Alan Lamb, leader of the Conservative group, asked whether the budget would remain balanced at the start of the new financial year.

He said: “It’s not good news, is it? Are we confident that in month one next year we are still going to be reporting a balanced budget, or can we already predict that there’s going to be an overspend when we come back in March?”

Coun Coupar, executive member for resources, said: “We are not unique in the country in terms of the pressure for funding around children’s services and the inadequacy of funding from the government to allow us to do that job.”

The council’s proposed budget for 2024/25 will be debated at a full council meeting on February 21.

A report to the executive board meeting said there was an estimated a budget gap of £64.6m in 2025/26 and a further £47.1m in 2026/27.

Councils must present a balanced budget to avoid issuing a Section 114 notice, effectively declaring bankruptcy.

The report said: “It needs to be recognised that we are not funded to provide all the functions we currently do, and so future service provision must be provided within the limited resources available.”

Leeds Civic Hall.

Foster care fees rise

Foster carers will be paid more for their services as the council seeks to improve the care of vulnerable children in the city.

Leeds City Council has agreed an increase in weekly fees and maintenance payments to help families meet the rising cost of living.

A report to the council’s executive board said the move would cost £1.8m this financial year and was included in an overspend in the Children and Families budget.

But the move would save money in the long term by helping to recruit foster carers and avoid more children being looked after in costly residential placements.

Coun Fiona Venner, executive member for children’s social care (Lab, Kirkstall), said: “We are doing this because it is the right thing to do, because our foster carers do need to be paid properly for the incredibly important and skilled work they do.

“It’s also something we can’t afford not to do because we have to recruit and retain our foster carers. Foster care delivers the best outcomes for children.”

The executive board was asked to agree a five per cent increase in fees and a seven per cent increase in maintenance allowances for foster carers. Both would be backdated to April 2023.

Coun Venner said there was a risk of foster carers leaving the council service to work for private providers if fees were not increased.

A report to Wednesday’s executive board meeting said the council would have to spend an extra £9.4m a year on Independent Fostering Agency (IFA) placements if it no longer had any in-house foster carers.

It said: “A loss of internal foster placements will drive our overall costs up as we source provision from the private sector and reduce the quality of placements for our children.”

Coun Alan Lamb, Conservative group leader, said the increase in fees could go further. He said: “It sticks in my throat every time I think of the amount of money going to external residential placements. I simply cannot get my head around how it can cost so much.”

The meeting was told around 60 per cent of Leeds foster children were living in in-house placements.

Julie Longworth, the council’s director of children and families, said more skilled foster carers were being recruited.

She added: “The fact that we have got 60 per cent of our children in in-house foster care is really positive. But absolutely we are continuing to drive that.”

WLD has been tracking council budget cuts over the past few years, via our Cutswatch series.

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