Leeds City Council has released its initial budget proposals for next year, looking to deliver approximately £106.4million of further overall savings as the cost of supporting social care demand and other pressures continues to increase for 2025/26.
Leeds, like councils across the country, faces significantly increased costs to provide services and rising demand, especially in social care for vulnerable children and adults.
This is being seen in supporting looked after children, especially the most vulnerable with high levels of need requiring costly external placements, as well as for adult social care with increases in demand for older people, adults with learning difficulties and those needing support with mental health.
The latest figures for Leeds show the scale and the impact of the national care system of external residential provision for children which is being felt by councils across the country.
In Leeds in the last four years the costs associated with looking after children in external residential care has risen by 75 per cent, from £68million to £119million this year. The average cost of an external residential placement has gone up by 45 per cent since 2021/22 to currently £6,300 per week or £340,000 per year for each child being cared for. Costs for those children with especially complex needs, however, can be up to £1million per year per child.
In adult social care, the number of working age adults and older people being supported has increased by 20 per cent in the last three years, and the overall demand budget for these groups has risen by £100m in the same period.
Of the overall rounded £106.4million savings required in the council’s proposed budget for 2025/26, £23.8m were already built into the financial strategy, £37.4m of proposals were considered by the council’s executive board at its October meeting, and a further £45.3m are being put forward for consideration this month to achieve the balanced budget legally required each year of all councils.
The budget proposals include an increase of 4.98 per cent on council tax, of which 1.99 per cent is dedicated to adult social care costs. Council tax in Leeds in 2024/25 was the lowest of all comparable core cities in England
All council assets and services are being continuously assessed and reviewed to see how they can help mitigate the financial position. The council has also enacted a freeze on recruitment, as well as on non-essential spending except where necessary for health and safety or statutory reasons.
The initial budget proposals to deliver the additional savings required next year include the following specific service areas to be reviewed:
- Non-statutory grants across adults and health services
- In-house care delivery service and day opportunities buildings
- Impact of a preventative programme in adult social care services
- Passenger transport in social care
- Transport savings in children and families services
- Savings around reducing numbers of children in Leeds care system, providing ‘right provision for the right time’ support
- Children’s centres in Leeds and more integration in local services
- Possible leasing out of Middleton Leisure Centre
- Potential introduction of ‘pay as you feel’ admission charges at city centre museums and galleries sites
- Closure of Abbey House Museum
- Community committees and locality working
- Consultation on possible savings and income around bowling green provision
- Print and sign services
The impact of the savings proposals considered in October and being put forward in December is an estimated reduction of 243 budgeted full-time equivalent posts in the council, with a continued commitment to trade union consultation to avoid, reduce and mitigate the needs for compulsory redundancies. However, given the size of the financial challenge for 2025/26 the council may find itself in a position where compulsory redundancies cannot be avoided.
Leader of Leeds City Council Councillor James Lewis said:
The large increase in demand for many services, particularly social care, means we need to take action to ensure we meet our legal requirement to balance the council’s budget each year.
Around 60 per cent of the council’s budget is spent on social care in Leeds, and the increase in council tax helps towards this. We expect to receive further detail on national initiatives to support local government towards the end of December.
Beyond next year, the council is provisionally expecting to need to find further savings of £35.2million in 2026/27 and £29.6million in 2027/28.
The initial budget proposals for 2025/26 will be considered by the council’s executive board on Wednesday 11 December before going out for consultation with the public, partners and stakeholders.
Final proposals will be presented in the new year to be discussed and voted on by full council in February. The initial budget and savings proposals report can be seen at Council and democracy (agenda item 13).
