Double tax bombshell for Leeds families

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leeds families have been delivered a double tax whammy two weeks before Christmas - as the city tries to plug an £87m funding gap in 2016.

The city council has revealed plans to raise council tax by 1.99 per cent next year, as well as imposing a new two per cent social care levy to offset Government cuts to frontline care services.

“These figures are worse than we feared and should make clear to everyone in Leeds that although in many ways the city is performing fantastically well, if anyone believes austerity is over it most definitely is not.”

Laying out the proposals, leader of Leeds City Council Judith Blake today warned that “austerity is not over, another incredibly difficult year lies ahead”.

A new report detailing the council’s financial position for next year warns of further cuts of £24m to Government core funding, with rising costs and demand for services leaving an overall funding gap of £87.2m for next year.

It adds to the more than £180m already slashed from the city’s purse, a drop of more than 40 per cent since 2010.

And in a stark warning, families have been told to expect a further 30 per cent shortfall by 2019/20.

The news comes in a year which has already seen the Leeds’s public health funding reduced by £2.8m. Further cuts will mean an estimated reduction in health grant of £3.9m in 2016/17.

Over the next five years the council estimates it will have £25m less to spend on public health priorities in Leeds.

Leader of Leeds City Council councillor Judith Blake said: “These figures are worse than we feared and should make clear to everyone in Leeds that although in many ways the city is performing fantastically well, if anyone believes austerity is over it most definitely is not.

“We still face another incredibly difficult year in Leeds for public services, which will mean more very tough decisions to come.”

All areas of the council will be asked to make savings and efficiencies, although services for vulnerable young and older people will get the lion’s share - 64.1 per cent - of the total council budget for 2016/17.

The council is still awaiting more details from the government before making a final recommendation on council tax, but in a statement today, the authority said that “given the anticipated financial position it is proposed to rise by 1.99 per cent, plus the two per cent social care precept suggested by the Government”.

Chancellor George Osborne announced the new social care levy in last month’s spending review, claiming it would raise £2bn across the country, a figure disputed by some commentators who believe that some deprived area - including in the North - will raise too little extra revenue from it to make any difference.

In one small ray of light, social housing rents in Leeds will reduce by one per cent next year in line with Government policy, although it is expected there will be a general rise in council fees and charges in addition to specific increases in some areas.

The council itself will continue to get smaller in size, with a reduction in staff numbers of 259 full-time equivalent posts (ftes) next year as part of a further loss of 1,000 to 2,000 ftes by 2020. These will add to more than 2,500 full-time equivalent posts the council has reduced by since 2010, saving £55m a year as a result. The council will also continue to move to becoming a Real Living Wage employer, with a minimum £8.01 per hour rate paid to all staff from April 2016.

Councillor Blake added: “More difficult discussions and decisions lie ahead, but we are committed to being a compassionate city with a strong economy and I continue to have the utmost confidence in the resilience of the people of Leeds to meet this challenge.”

The initial budget proposals for 2016/17 will be discussed and consulted on before being finalised at the meeting of full council in February.