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Council faces worst funding crisis in its history

Published on Friday, November 18, 2022

2 minute read

City Hall

LEICESTER’S City Mayor says the autumn statement published by the Chancellor yesterday will lead to more cuts to essential services, as the city council prepares for the worst funding crisis it has ever experienced.

City Mayor Sir Peter Soulsby said: “Like other councils across the country we expect to be facing even greater budget pressures over the next few years, and the Chancellor said nothing yesterday that will change this.

“At our current level of spending we will be short of up to £50m a year by 2024 and are having to make huge cuts just to keep basic services going. This is on top of the £90m of savings we have already had to make to services other than social care.

“This will put at risk the services people value – including our parks, museums, street cleaning services, and leisure centres. After yesterday’s statement, the bad news is that the years to come look like being even worse."

The Chancellor announced yesterday that local government will not get any additional funding over the next two years to cover inflation. Some extra money will be made available to cover adult social care, but not enough to cover cost increases.

Sir Peter said: “The Government has previously spoken about an end to austerity, but thanks to the current economic crisis – exacerbated by its disastrous mini-budget – we face the worst cuts’ crisis in this council’s history. And it’s not just Leicester; all local authorities are in the same boat.”

The Chancellor also announced that local authorities will be able to increase council tax by 5%. Sir Peter said: “The Government has ducked its responsibility to provide councils with an adequate level of funding, and has instead left us with an extremely difficult decision: do we cut vital services or do we increase taxes during a cost of living crisis? There are no easy options.”

The council’s director of finance, Amy Oliver said: “We knew we would need to make more savings as the Government told us last year there would be no new money for councils.

“We continue to face increasing costs as more older people need the support of social care services, and the situation is now much more difficult because of the recent surge in inflation.

“We have of course also seen significant increases in energy costs for all of our buildings, and even though our staff have received a pay award below inflation, it is still more than we expected when we set the budget.

“The city council is continually making efficiencies, but with a shortfall of up to £50m in what we need to spend and the funding we have available – huge savings will have to be made over the next two years.”

Leicester City Council will set its budget for 2023 on 22nd February.