Savings options will "inevitably" need to include "stopping or reducing" services if Leicestershire County Council is to balance its books over the coming years, a report has warned. Increasing demand in key services areas suggests the authority will "face significant additional costs" for the current 2025/26 financial year and in future years too. 

Around £8.12 million more already needs to be found to meet anticipated spending this year compared to expectations when the budget was agreed in February, county council officers have said.

Much of the additional financial strain relates to the children's and schools' budgets, with more children needing special needs and social care placements, and demand for Education, Health and Care Plans (EHCPs) rising. 

This pressure makes it "likely" that further savings will be needed on top of the £91 million-worth that the authority already had to find by the end of 2028/29.

However, this comes on the back of around £290 million already saved since 2010, and Leicestershire County Council has long prided itself on being one of the most efficient local authorities in the country. 

Council officers have now warned that it "will not be possible to balance the council's financial position without affecting front line service delivery".

The authority had already been planning to use almost £5 million of reserves – one-off pots of money used to bridge the gap between income and outgoings – to break even this year. 

Reserves are a "short-term" solution, however, and do not "solve the structural imbalance between income and expenditure", officers said.

Local authorities must show a balanced budget each year or must file a Section 114 notice, essentially declaring themselves bankrupt. 

Officers are currently refreshing the council's future spending plan and have not set out how much the budget gap is anticipated to be over the coming years.

This is expected to be made public in December alongside proposals for tackling the growing financial pressure and any increased costs to residents. 

The news makes it increasingly unlikely that the new leader of the county council, Reform UK's Dan Harrison, will be able to follow through with his previously stated hopes of cutting council tax.

Each one per cent rise in the charge generates around £4 million for the council, or around £20 million a year if a 4.99 per cent rise is taken forward. If the tax is not increased, that money would need to be found through additional savings. 

The authority is planning to carry out an external efficiency review of its services which will look at the current savings plan and "recommend new opportunities to reduce costs and deliver services differently", officers have said.

Procurement for this is underway and is expected to be completed by the end of October. 

However, savings options will "inevitably" have to include "stopping or reducing some services", officers have warned. Additional spending for service improvements has also been branded "clearly unaffordable" and there is "no room for" new schemes such as highways improvements and building projects unless they invest to save or relate to "end of life assets needed for essential service delivery". 

Leicestershire County Council's scrutiny commission is set to meet on Monday 8th September to discuss the report before it is considered by the Reform UK county cabinet on Friday 12th September.