Leeds City Council has frozen most recruitment and “non-essential” spending as it battles bleak financial prospects.
The local authority has to find more than £16m worth of savings over the next five months. The freeze includes restrictions on staff working overtime and on the use of agency workers, although a council report said a “small number of exceptions” could be made in some cases.
High inflation and soaring energy costs have swallowed up much of the council’s bank balance already this year. A meeting on Wednesday was told the authority’s financial position was “likely to get worse” than it is now.
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Pay negotiations with council staff also remain ongoing, with no agreement having been reached for the current financial year, which started in April.
Speaking at a meeting of the council’s senior leaders on Wednesday, chief financial officer Victoria Bradshaw said her department was “working hard” to come up with solutions.
She told councillors: “We’re working against a high inflation economy and this is having a big impact on services and demand for services, so though we are trying to forecast and look at mitigation, it’s very difficult at the moment.”
Ms Bradshaw said she was exploring a “number of avenues” around how the council’s energy consumption could be cut and would report back next month.
She added: “We’ve only just put the freeze on some non-essential spend and on some recruitment, so it’s early yet to see what the impact of that will be.
“But we are envisaging this position will be getting worse than it is at the moment and we’ve got to keep a tight rein on the expenditure that we have.”
The news comes amid ever-growing demands on local authorities across the UK. Around 60 per cent of council funds are spent on social care and looking after vulnerable children. Spending on both is rapidly increasing because of the rising numbers of young and old who need help.
The impact on ratepayers could be significant too, with council tax likely to be hiked again in April, as it is almost every year.
The council’s deputy leader and executive member for resources, Councillor Debra Coupar said: “It’s a really dynamic situation with the financial climate we’re in. We’re in a difficult situation, which means we’re going to be facing increased pressures as a local authority.”
The council’s chief executive, Tom Riordan, called on the government to make an early announcement on how much funding they would give local authorities next year, to make financial planning easier.
He told the meeting: “It’s vital we get the recognition from the government, that among the many other pressures there are in terms of who this is hitting, that local government is not exempt from this. We’re right in the middle of it.”
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