Budget

The revenue and capital budgets for 2025-2026 were agreed at full council on 19 February 2025.

The outlook for our finances is the most difficult it has ever been. This is due to the severe austerity imposed by the previous government and the need to spend ever greater proportions of our (reduced) budget on social care. The result is that funds for all our other services have been squeezed: after allowing for inflation, by 2024/25 we were spending around half of what we spent in 2010. Within this, we had to find money to respond to the recent pressures in homelessness.

Nonetheless, we have been able to prepare a plan which, if successful, will enable us to balance our budget for the next three years.

The plan includes a package of one-off monies, cuts to some capital projects, additional borrowing and annual savings of £20m in the cost of services. There will be some painful decisions to take now we have set the budget, but we will do all we can to minimise the impact.

The capital programme includes works to schools, highways and building repairs, including maintaining our community buildings and grants to enable disabled people to live in their homes. It is funded from money raised by selling land, from borrowing and from grants given to us for capital schemes. By law, we cannot spend these monies on the council’s day-to-day services, which are funded by the separate revenue budget.

Local government funding reform

From December 2024 to February 2025, the government held a consultation on changes to the way local government is financed. A summary of the response submitted by Leicester City Council is attached below.