Leicestershire County Council propose to increase Council Tax next year

"Although we are not in crisis, we have to tackle the 20 per cent gap between expenditure and income, so need to deliver services differently."

Leicestershire County Council has announced its four-year budget proposal which includes increasing Council Tax by three per cent and an increase of two per cent for the adult social care precept.

The council said that 'social care prices, growing service demand and inflation' means they will use up to £12m of reserves to help balance the books next year. 

Declan Keegan, the council's director of corporate resources, said: "Councils are facing their toughest ever budget challenge. Although we are not in crisis, we have to tackle the 20 per cent gap between expenditure and income, so need to deliver services differently.

"Supporting vulnerable people remains our priority. And with costs and demand rocketing, it’s crucial we continue to transform how we work whilst also getting people the help they need.

"We’re low funded, very efficient and high performing. But the Government’s autumn statement was dire for councils, with no extra funding and the national living wage increase alone adding £20m to our costs. 

"From stepping up finance controls, to making sure we’re not subsidising other organisations’ services, we’re doing everything we can to bring down our significant budget gap. Using our reserves to help make ends meet is clearly not sustainable."

A three per cent Council Tax increase for core services would generate £11m for front-line services and raising the adult social care precept would generate a further £7m.  

A three per cent Council Tax increase for a Band D home equates to 88p a week for core services and a two per cent rise for adult social care is equivalent to 48p a week. 

Labour's leader at County Hall has responded to the County Council draft budget.

Cllr Amanda Hack said: “Leicestershire County Council is confronted with a large budget deficit. Hard pressed Council Tax payers in the county are rightly asking ‘Why?’.

"The answer is quite straightforward. The Conservative government in Westminster has ignored repeated calls from local authorities like Leicestershire for the cash needed to meet our statutory obligations – everyday things like adult social care and school transport.

"Council officers in Leicestershire have worked extraordinarily hard to balance the books, but what was a difficult task, is now practically impossible thanks to the Tories’ disastrous budget in 2022, which sent interest rates soaring, crashed the economy and made the cost-of-living crisis even worse.

"Once again local tax payers are being asked to pick up the bill, but even if we increase Council Tax to the maximum allowed by central government, the deficit cannot be covered.

"Leicestershire needs urgent help to bridge the gap. The Conservatives at County Hall must pick up the phone and talk to their colleagues in Westminster to work out a rescue plan. After all, they got us into this mess, and they have a responsibility to get us out of it.”

Leicestershire County Council has forecast that their budget gap could top £85m by 2028.

The four-year budget plan includes £127m more to support vulnerable people and redesigning services to manage future demand.

The council have also stated that closing the budget gap may lead to a reduction of about 200 posts over the next four years and that staff turnover and vacancy management will mean that the number of compulsory redundancies will be much lower. 

The council’s cabinet will discuss the plan on Tuesday 19 December.

Cllr Michael Mullaney, leader of the Liberal Democrats at the County Council, said: “This budget crisis is the result of the people of Leicestershire being taken for granted for years by the Tory government. Leicestershire is at the back of the queue for government funding, Leicestershire gets the lowest funding from the government of any county in the country. The result of this is that people in Leicestershire will be paying more in Council Tax and getting less for it. We have seen vital services cut. Bus services like the 159 bus removed, roads and pavements not getting repaired. The Tory leadership of the County Council and the Tory MPs for Leicestershire have failed to get our area the fair deal it deserves from their Tory government. The government continues to be Scrooge when it comes to funding Leicestershire.”