A town hall freeze on recruitment has been announced as finance chiefs said that the council was on course for a £13 million overspend.
Councillors agreed to look more closely at spending cuts and possibly putting up fees and charges while holding back on some of the major projects which were planned or under way.
Unless the budget forecast improved, councillors were told, harsher measures might prove necessary.
The bleak outlook was spelt out when Brighton and Hove City Council’s Policy and Resources Committee met at Hove Town Hall yesterday (Thursday 6 October).
One challenge is a national pay award for local government staff while increased living costs were adding to the overall demand for council services from the public.
A report to the committee said that some “demand-led” services were adding to the pressures on the budget.
These included children’s and adult social care, home to school transport and temporary housing for rough sleepers.
Finance chiefs often forecast a budget overspend in the first part of the financial year but the 2022-23 prediction is much higher than usual.
Labour councillor Carmen Appich, joint leader of the opposition, asked for an urgent report to the cross-party members’ Budget Review Group as soon as last month’s figures were available.
Councillor Appich described the situation as a “crisis” and said that the projected overspend was more than the budget for leisure, parks and open spaces.
Potential cuts to services would have to be monitored carefully, she said, because taking money from one area could result in higher costs elsewhere.
Councillor Appich said: “Potentially, if the situation doesn’t improve, we will need to bring another report to a special Policy and Resources Committee before it might be too late to take decisive action and involve councillors in a debate about some potentially difficult decisions.”
Labour councillor Daniel Yates said that he warned at the previous two budgets that the council was not doing enough to protect itself from tough times which would worsen.
He said: “We’re a little bit too eager to see things continue where potentially we couldn’t identify long-term solutions for the funding – and it’s coming back to bite us.
“Regardless of that, it’s no good sitting back, pointing fingers and playing ‘yah boo’ politics. It is incumbent on us all to try to work together to find the right solutions.”
Green councillor David Gibson said that he was usually optimistic about the budget but the pressures were so significant that all parties needed to work together through the crisis.
He said that the situation was a “crisis from inflation and a hangover from covid”.
Besides the unpredicted pay rises, Councillor Gibson said that the potential overspend was “flatlining” or evening out.
Councillor Gibson said: “There are uncertainties. We fear a government that has just splashed out with massive borrowing but hasn’t provided an indication of how it will pay for it.
“It has also indicated they are ideologically committed to a small state. It’s likely not to be favourable to any (local government) settlements in the medium and probably in the short term.”
Fellow Green councillor Tom Druitt said that there were calls for lower taxes, better services, lower fees and covering the deficit.
He said: “We can’t have it all. We’ve got to make a decision. We’ve got to choose either higher taxation and fees and charges or further reductions in services.
“The only thing that is going to get us out of that binary choice is a better, proper, fairer funding settlement from government. That is what we need to be pushing.
“This is the weakest government I’ve seen in my lifetime and we have to get them to sort the house out and support local services to the value they need to be supported.”