City Mayor council tax letter

Dear Resident,

With this letter you will find your council tax bill for 2025/26.

Council tax helps pay for essential services provided by Leicester City Council, Leicestershire Police and Crime Commissioner, and the Combined Fire Authority.

As you may have seen in the press, local government is in severe financial difficulty across the country. A few councils have effectively declared themselves “bankrupt” because they cannot make ends meet, and many more are in trouble. The roots of this crisis are the previous Government’s grant cutbacks in the period since 2010, which hit deprived areas such as Leicester the hardest. We have also faced spending pressures in social care, where we are legally obliged to meet the needs of people who qualify for support. Financial problems have further spiralled in recent years due to higher inflation and the cost-of-living crisis. This has led to more demand for our services, particularly from families who are homeless.

The Government recognises the problems we face. It will provide some additional funding in 2025 for councils who have been worst hit over the last 15 years. However, as the Government itself has said, “there will be tough choices on all sides to get us back on the path to recovery, and it will take time.” As a result, we expect our income to be much less than we need for some years to come.

Despite this, our budget aims to ensure the city does not have to declare itself bankrupt in the next three years. We have managed our money well and have financial reserves, which we are using to cushion the impact of the national crisis on our services. We have also worked hard to control the costs of social care and to provide more housing for homeless families. However, we will still have to make savings of £20m per year. Wherever possible we will look to do this through modernising the way we deliver our services, but there is no doubt some savings will have an impact on the services we are able to provide. You can see more about our budget online at leicester.gov.uk/budget.

We await the Government’s longer term spending plans which are due in the spring; we also want to see what financial advantage will arise if local government in Leicester, Leicestershire and Rutland is reorganised. We still expect that, regrettably, we will have no option but to make yet more savings by 2028.

The Council will be increasing its tax this year by 5%, 2% of which is to support social care. The Combined Fire Authority is increasing its share of tax by 6.1%, and the Police and Crime Commissioner is increasing his share by 4.9%. This means total tax will also increase by 5%.

The amount of council tax we can charge is controlled by the Government, and we believe that most councils providing social services will need to increase their taxes by 5%.

I know that increases in living costs are making it very hard to make ends meet. Every year we help thousands of households who are struggling to pay. Next year there will be additional funding to support those who need help because of changes to our council tax support scheme. There is more information about discounts and support on the back of your bill or online at leicester.gov.uk/counciltax

You can also find information about cost-of-living support at leicester.gov.uk/costofliving. 

If you are worried that you might struggle to pay your council tax, please telephone 0116 454 1005 as soon as possible. Please quote your council tax reference number whenever you contact us.

Yours faithfully,

Sir Peter Soulsby, City Mayor