Council tax bills to rise by maximum level in Leicester

Councillors approved the 4.99% increase in the portion of tax paid to it by local households

Leicester City Council is to increase residents' council tax bills by the maximum allowable level as it struggles to balance its books in the next financial next year.

Councillors have voted to raise the bills to the 4.99% cap from April.

Labour mayor Sir Peter Soulsby said the authority was in a "very difficult and painful position".

He blamed government funding cuts but opposition councillors challenged his financial record over a decade.

Bills for Band A properties will rise by £61 a year

Sir Peter told a budget meeting, on Wednesday, the authority had averted having to declare itself effectively bankrupt as Nottingham City Council did in November.

"We are in a somewhat more favourable position because while we are approaching a cliff edge, the management of our budget over recent years has been very far-sighted," he said.

"We do find ourselves here despite the responsible steps we have taken over the past 10 years to control our spending and produce balanced budgets.

"We haven't, unlike some authorities, made unwise investments. We have built up reserves and we've avoided crisis cuts."

Sir Peter added: "This year, the pressures are going to be even more severe if we are to avoid going over that cliff edge some 12 months from now.

"It's not a situation of our making, but we can't shy away from the harsh reality this is going to be a very, very difficult year for us with some very difficult decisions to make."

Reserves depleted

Conservative group leader Deepak Bajaj accused the mayor of "blaming the government" to hide the financial cost of his own decisions.

Mr Bajaj said: "This Labour administration is not capable of protecting our much-needed front-line services which matter the most to the people in our city."

The budget was passed by 29 votes to 17.

The council tax rise means the council's share of the bill for Band A-rated properties, which make up the majority of homes in the city, will rise by just under £61 in 2024-25.

Leicestershire Police and Leicestershire Fire and Rescue Service will also raise their share of the council tax bills to the maximum level - by 4.76% and 3% respectively.

The Local Democracy Reporting Service (LDRS) said the council's expected budget gap for the coming financial year was £61m, and that it would use £53.9m of reserves, and £15m from an emergency account, to fill it.

This leaves the authority with just £7.9m in reserve with a shortfall of £78m predicted in 2025-26.