City council overspend grows to almost £40m

Leeds Civic HallImage source, tupungato/Getty Images
Image caption,

Leeds City Council's proposed budget for next year will be debated on 21 February

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Leeds City Council's overspend has grown to just under £40m, as decisions loom over spending cuts to balance its budget.

The local authority 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 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.

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 council's books this year, the Local Democracy Reporting Service said.

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

'Not good news'

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.

Councillor 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?”

Ms Coupar, who is also 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 21 February.

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

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