Labour says budget staves off threat of bankruptcy

Labour said that its proposals for a balanced budget will stave off the threat of bankruptcy for Brighton and Hove City Council.

But newly published budget papers said that 186 posts may have to be deleted – 5 per cent – although many of them were currently vacant as the council worked to keep costs down.

Even so, the budget papers said that 75 staff are expected to go and £1 million has been set aside to cover redundancy payments.

Council tax bills are expected to go up by 4.99 per cent including 2 per cent to be ringfenced for adult social care. This is the maximum permitted rise. With police and fire precepts, band D bills are likely to top £2,300 a year, up £110. More detail below.

The council has yet to publish the detailed “budget book” but total spending next year, including capital spending on big projects, is likely to top £1.2 billion.

Labour had warned of a £33 million budget gap – between the amount of money the council expected to receive and the amount that it expected to spend – in 2024-25.

The party said that a package of proposed savings and cuts totalling £24 million had helped close the gap, with increases in council tax, fees and charges expected to boost income.

All this has taken place as Labour said that it had brought a projected overspend of £15 million this year into balance since winning a majority at the local elections last May.

Council leader Bella Sankey, said: “There’s been a deeply worrying trend of local authorities across the country having to issue ‘section 114 notices’ and effectively declaring themselves bankrupt – and others having to apply for emergency government support.

“It is really important that this council, through careful planning and financial management, has proposed a balanced budget for next year that would avoid effective bankruptcy.”

Councillor Sankey added: “While it’s good news that we’re not in the same position and have managed to bring our in-year position under control, we’ve still had to propose significant savings to avoid having to call in government commissioners.

“Central government funding simply hasn’t kept pace with the growing demand and high inflationary costs of meeting the needs of our local community and a sustainable future funding solution is needed.”

The council said: “Over the past 14 years, central government funding has reduced by almost £100 million in real terms – a 40 per cent reduction over the period.

“Only £1 in every £5 of the council’s expenditure is raised through council tax, with the rest coming from government grants, business rates and other fees or charges.”

The proposals for 2024-25, the financial year starting in April, include

• nearly £24 million in savings to help balance the budget, avoid bankruptcy and protect essential services
• redesign of the organisation and streamlined management and ways of working to save £2.4 million to improve how services are delivered
• investment to protect and improve essential everyday services such as street cleaning, weed management, keeping public toilets open – including reopening the Pavilion Gardens toilets – and maintaining all council-run nurseries and libraries

The council is expected to maintain its “council tax reduction scheme” for more than 19,000 households on low incomes as well as care-leavers.

It also pledged to “prioritise spending to deliver the council vision of a ‘better Brighton and Hove for all’ including new sports and leisure facilities to improve health and wellbeing such as a new pool at Withdean”.

At the annual “budget council” meeting in three weeks’ time, councillors are expected to “confirm capital investment in infrastructure projects to ensure we have a city we can be proud of”.

Capital projects include changes to the bus network, progress on the restoration of the Maderia Terraces, the “Kingsway to the sea” scheme, tree replacements, playground makeovers and new swimming and leisure facilities.

Forecasts in the budget papers show borrowing at £204 million at the start of the current 2023-24 financial year. But loans are expected to total £473 million in 2028-29.

Some of the biggest spending includes a £300 million house-building programme.

In the financial year from April, almost £58 million is set aside, along with almost £30 million that was budgeted for the current year but which has not yet been spent.

The deputy leader of the council Jacob Taylor, who leads on finance, said: “Deciding the budget is one of the most important decisions the council can make. We take how public finances are spent and managed very seriously.

“That’s why we’ve worked so hard to bring the council in on budget this year and propose a balanced budget next year.”

Councillor Taylor added: “There can be no doubt that the scale of financial challenge has made this the most difficult budget to set in council history and that means difficult decisions have to be made.

“However, these proposals will keep public finances on track, prioritise spending on frontline essential services, while continuing to protect our most vulnerable residents.”

The proposed 4.99 per cent increase in council tax would mean that the Brighton and Hove City Council element of the average band D council tax bill would go up by £94.03 from £1,883.63 to £1,977.66 from April.

The full amount for the average band D council tax bill for the Brighton and Hove area for 2024-25 will also include precepts from the Sussex police and crime commissioner and the East Sussex Fire Authority which have not yet been set.

The police and crime commissioner is expected to put the precept up by £13 for a band D property – from £239.91 to £252.91.

And the East Sussex Fire Authority is expected to put the precept up by £3.12 or 2.99 per cent for a band D property – from £104.37 to £107.49.

In the current financial year, overall band D bills in Brighton and Hove were £2,227.91 – up £109.60 from £2,118.31. This was the equivalent of £185.66 a month or £42.84 a week.

From April, overall band D bills are expected to go up £110.15 from £2,227.91 to £2,338.06 – or almost £194.84 a month or £44.96 a week.

And people in a few areas of Brighton, such as those in the Rottingdean parish, will receive a slightly higher bill.

Council tax funds about a fifth of overall council spending, with the rest coming from grants, business rates, fees, charges, commercial rents and other income streams.