Coronavirus: Leeds City Council warns of cuts and job losses

Leeds City Council said the government needs to step in and help stabilise local authority finances

The coronavirus pandemic could result in "draconian" cuts in services and job losses without further government support, a council has warned.

Leeds City Council said it expected to face a budget overspend of almost £200m this year.

It could have to introduce an emergency budget in August and cut 415 full-time equivalent jobs, the authority added..

The government said it was working on a comprehensive plan to support councils over the coming year.

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Losses from council tax and business rates as a result of Covid-19 have accounted for £61m of the overspend, Victoria Bradshaw, the council's chief finance officer, said.

She outlined the scale of the situation, saying the overspend position for the current year stood at around £197.6m. The authority's total budget for 2020/21 is £530m.

The council received government funding of £43.7m towards those costs from a pot of £3.2bn, but the Local Government Association last month estimated a further £6bn would be needed to support councils across the country in this financial year.

The government has previously said it was giving councils "unprecedented" support.

Tom Riordan, the council's chief executive said the situation was far worse than that following the financial crisis in 2010.

"The potential implications are as severe as it gets," he said.

"If we anticipate that we can't balance our budget, we have to take steps to pare our spending right back to the things we just have a legal duty to provide.

"That would rule out many of the services we provide in the city today.

"For example, all the cultural institutions we fund in the city are non-statutory."

Analysis

James Vincent, Political Editor BBC Yorkshire

When I suggest doing a council funding story I sometimes get short shrift from producers. "Sounds a bit boring", they might say.

Losing your entire council service is not boring. It's not only about what your council tax gets you, it's about potentially losing your democratic right to make decisions about what happens in your town or city.

I've never heard local government officers sound this worried about their financial futures. Remember these people aren't politicians looking to have a go at any particular government.

They're the ones paid to look after people by balancing the books. At the moment they're not sure they can.

Mr Riordan added that job losses would be inevitable and officers had issued a formal notice of a consultation with the unions.

"We would basically have to take very draconian measures," he said.

He said the government would be examining the situation in July and hoped they would step in to stabilise local council finances.

Council leader Judith Blake said, given current projections, Leeds was working with other local authorities and was "urgently supplying the information to government."

"The situation is clearly very serious," she said.

"I hope the government hears us and acts so the council can protect services for the people of Leeds."

A Ministry of Housing, Communities and Local Government spokesperson said the government had provided more than £27bn to support local councils, businesses and communities during the coronavirus pandemic.

This included £600m to help reduce the infection rate in care homes and £300m to support track and trace, they said.

"We will continue to work closely with councils as they support their communities through this national emergency and we are working on a comprehensive plan to ensure councils' financial sustainability over the coming year," they added.

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