Leeds City Council Proposes 2026/27 Budget with Council Tax Rise

Council outlines initial budget plans amid increased government funding

Leeds City Council has released its initial budget proposals for the 2026/27 financial year, highlighting an expected increase in government funding alongside a planned rise in the council tax. The proposals aim to balance rising costs and demand for services, particularly in care for vulnerable children and older people, while maintaining key local services.

Budget overview and funding sources

The council’s net budget is proposed to increase by £70.4 million for 2026/27. This increase comprises £43.5 million in additional government funding and £26.9 million from local funding streams. The council intends to use this budget to continue delivering and improving everyday services such as free garden waste collections, glass recycling in green bins, tackling flytipping, and repairing potholes.

Council tax changes

The proposals include a 2.99% increase to the Leeds City Council element of council tax, which is below the rate of inflation. In addition, there is a 2% rise specifically to support adult social care costs. For a Band D property, this would mean an annual increase of £90, equivalent to approximately £1.74 per week.

Currently, Leeds has the second lowest council tax among comparable English core cities and West Yorkshire districts.

Financial challenges and efficiency measures

Despite the additional funding, the council faces a financial challenge requiring further measures to meet a balanced budget. Following agreed efficiencies and savings, a remaining £39.5 million gap is proposed to be addressed through:

• Adoption of new technologies and working methods
• Preventative work with vulnerable children, families, and older people to reduce reliance on care services
• Collaboration with partners to support people in home environments where appropriate

The council also plans to strengthen its financial position by returning £29.9 million to reserves, which have been depleted in recent years to support frontline services.

Organisational changes and priorities

The budget aligns with the council’s strategic priorities, including the Leeds Ambitions focusing on health and wellbeing, inclusive growth, thriving communities, and sustainability. The new Council Plan aims to reshape the authority by improving organisational effectiveness, driving growth, increasing revenue, and enhancing locality working with partners and communities.

As part of this reshaping, the council has been reducing its estate, releasing over 120 buildings in recent years. This has generated more than £28 million in capital receipts and over £9 million in cost savings.

Staffing and pay

The budget proposals indicate only modest changes in council staffing levels, reflecting ongoing efforts to avoid compulsory redundancies through engagement with trade unions. Since 2010/11, the council’s workforce has reduced by 3,607 staff.

From 1 April 2026, the council plans to increase its hourly pay rate to the Real Living Wage of £13.45 per hour for lower-paid staff.

Next steps

If approved by the council’s executive board at the meeting on 17 December 2025, the initial budget proposals will be subject to public and stakeholder consultation. The final budget will be considered by the executive board and full council during the annual budget debate in February 2026.

Further details and documents related to the budget proposals can be found on the Leeds City Council website under the Council and Democracy section.