Council publishes one-year stop-gap budget plan

Leicester City Council has published its draft budget plans for next year.

City Hall Leicester

The council has prepared a stop-gap budget covering the next 12 months only and will review its finances when there is more certainty.


City Mayor Sir Peter Soulsby said: “The budget for 2021 follows 10 years of austerity, in which we have lost over £100million of Government funding. Our difficulties have been compounded by the coronavirus pandemic. We have worked hard to support businesses and vulnerable residents during this time, and do not know how much we will still need to spend. Nor do we know what spending cuts the Government will make in future to repay the extra debt it has incurred. When this is all over, I greatly fear a damaging new round of austerity.


Sir Peter added: “We set out to make minimal changes this year. We are only able to do this because of the firm action we have taken to make savings in the past. This is enabling us to weather the covid storm without crisis cuts.”


The budget makes few changes to money available for services, although an extra £10million will need to be found to meet the rising costs of adult social care. The Government is expected to provide an additional £2million and has allowed councils to increase council tax by up to 5%, with 3% ringfenced to help meet the shortfall in the social care budget.


It is proposed that council tax in Leicester increases by the full 5% in 2021/22.

Leicester City Council’s annual Government grant funding has been slashed from £289million in 2010, to £179million in 2020. The annual cost for social care has risen from £128million to £197million over the same period.


Sir Peter said: “We obviously want to provide properly for the growing numbers of older people needing social care. The Government should be fully funding these extra costs, not passing the buck to local taxpayers.


“Even when the extra 3% tax is taken into account, we are still well short of £10million. I hope that we will now start to see progress on the long-delayed reform of social care funding which the Government has promised for next year”


Alison Greenhill, Leicester City Council director of finance, added: “The legacy of the pandemic will have a major impact on what the council needs to provide in the future, and how we provide it. It is too soon to look at this sensibly while we are still subject to restrictions and uncertainty, and the budget is a temporary measure until we can properly plan for 2022.


“We are fortunate in having savings from earlier years that we can use to balance the budget, and give us time to review what we need to do. My expectation is that we will also face a number of years of spending cuts which we will need to plan for.”


Leicester is the only city in England which has been subject to continuous covid restrictions since March.


The annual budget proposals will be formally considered at a meeting of full council on 17 February 2021.


Details of the draft budget are available to view on the City Mayor’s webpages at www.leicester.gov.uk/citymayor