Brighton and Hove City Council is on course for a £10 million overspend in the current financial year if it takes no action to make savings.
A report covering the first two months – April and May – said that £6.5 million of proposed savings in the 2024-25 budget are also potentially at risk.
The report to the council’s cabinet said that managing the financial challenges could affect some services because of “recovery plans” and other actions.
The pressure points in this year’s budget spending include £1.6 million on services provided jointly with the NHS.
The budget for schools is at risk of a £456,000 overspend – and 46 schools require a “licensed deficit” totalling nearly £11 million. The report said that the council did not have enough money to cover the shortfalls.
Other risks come from “demand-led budgets” such as for community care and temporary housing, contributing to a £4 million forecast overspend.
Health and adult social care budgets are under pressure because more people have increasingly complex demands.
Last year the number of households presenting as homeless went up by 20 per cent and so far this year it has already increased by 30 per cent. Spending on temporary housing is running at 20 per cent higher than budget.
In Brighton and Hove the price of overnight accommodation has increased by 12 per cent since 2023-24 resulting in a forecast £2.5 million overspend.
Emergency nightly booked accommodation is forecast to overspend by £1.6 million. By the middle of last month, 263 households were in nightly booked housing. The budget was for below 200.
A change in the private rented sector, with landlords selling up and ending tenancies is contributing to increased homelessness.
If matters do not improve, councillors and officials may have to consider recruitment freezes and other spending restrictions.
The report said: “It is important to note that early projections in each financial year are likely to indicate higher forecast risks as there are significant underlying demand pressures to be managed down.
“Pay awards currently tend to be above budget assumptions and there are large annual savings targets required to balance the budget.
“Implementing and addressing these risks is often complex and can have varying lead-in times.
“There is also limited trend data available at this stage and very limited time to react to emerging information in order to develop recovery measures.”
The cabinet is due to meet at Hove Town Hall at 4.30pm on Thursday 18 July. The meeting is scheduled to be webcast on the council’s website.
The council are spending £1,250 per person per week on emergency accommodation, way above the market price when it comes to some of the guest houses it uses, and paying for these properties to be refurbished once they return to being guest houses again.
Does that make financial sense to anyone?
Certainly explains the pilot scheme approved with the aim of halving the amount spent on this aspect.
Look at Events as well. Private companies make millions from the events while the council rents out our parks for a few thousand or in one case gives away the space for free. Brighton is like a get-rich-quick-scheme for some people.
When Labour made noise about a £3 million overspend in May 2023, rather than point the blame at the real reason, which is the impact of austerity and cuts to local authority budgets, they blamed the Greens. Who are Labour going to blame now they’ve been running the city for the last 14 months.
If you point the finger when it’s politically convenient, you can expect it to come back round to bite you. Presumably now we have a Labour Govt too, there should be no problem for them sorting out the mess.
It was more to do with the poor financial management that made that overspend surprisingly appear because the accounts were so poorly audited.
Audit and financial management are not synonymous. One takes place after the other has occurred. The financial management function is undertaken by council employees who are given direction of funding and spend by the councillors. The audit is undertaken by external firms appointed to verify the funding and spend that has taken place. When spending is undertaken to meet statutory responsibilities over which the council has no control then the likelihood of failure to control spend increases. This is a legacy of Tory mismanagement at government level and has nothing to do with financial management capabilities at council level. Labour are now finding out for themselves that the Tories were shifting the buck to local administrations. It’s just a shame that Labour didn’t twig that fact before criticising the Greens as they have now opened themselves up to the same criticism with no defence available as they denied it elsewhere. Oh! the joys of local government.
So Greens inherit a £30+ million deficit during the pandemic from Labour when their administration collapsed, Greens run the council for 2 and a half years as a minority administration which means they needed support from other parties to make any decisions, including passing a budget, Labour make noise about a £3 million overspend when they take over in 2023 and do lots of finger pointing, and the following year when there’s a £10 million overspend on their watch it’s nothing to do with them.
You’re loyal to Labour if nothing else Benjamin. Greens were dealt a raw deal when they took over during the pandemic. Labour were dealt a raw deal when they took the council back because of the continuing impact of austerity. Labour councils around the country have struggled. This issue is not about financial mismanagement, or poor auditing, it’s about austerity, and it was just plain wrong and misleading for Labour to have played political games with that fact when they were in opposition and at the start of their administration in 2023. Let’s see how Labour solve it now they run the council with a majority AND they’ve formed the government.
There we go with the usual dribble about government shortfalls in budgets.
Fact, we’ve known about the so called ‘budget’ deficiencies from Government since 2010, yet the ‘Greens’ tried to convince us it was something ‘new’ and failed to spend wisely. £13million squandered on bike and hubs, more into various vanity projects. Mismanagement at local level is where the problems lie.
I have no doubt at all
Perhaps with any expansion of the rampion wind farm an couple of extra ones could be owned by the council ?
You’d also take on the responsibility of maintaining, but without the economy of scale. I wonder if this would work?
Just amazing how the cost of those unnecessary bike lanes just mount up 🤣 Also bribing the GMB not to strike 😳
Being fit and active throughout your life ensures you a) remain healthy for longer and b) reduce the burden on the NHS. Why would you argue against either?
We shouldn’t be reducing the burden on the least effective healthcare provider in Europe. Clap less expect more.
Can you think of a reason why the NHS is struggling?
Being fit and active means just cycling does it ?
Perhaps if the council had not ending the homelessness prevention work that the Youth Advisory Service during their last round of budget cuts in February, there wouldn’t have been such a big increase in people presenting as homeless. It’s always short-sighted to make cuts to prevention services, and councillors who do, can expect costs to spiral in other parts of council budgets.
It’s quite worrying if Labour councillors failed to foresee that spending could increase in “demand-led budgets” like community care and temporary housing when the national picture is so dire. It’s not rocket science to have predicted that and planned for it. Quite why they seem surprised by it now is the most baffling part of it all.
I feel this cabinet’s fault. Last year, they had cmtt, which allowed for more diversified scrutiny, especially from their own backbench in public.
That doesn’t work, since the cabinet hasn’t been around that long, and decisions would have been made far before the cabinet was formed.
No problem, Scrap Valley Gardens 3 – £13m. = £6m from residents and scrap the new Hove cycle lane, which even Bricycles are complaining is overpriced at £4m
Not quite, because a large portion of that is grant funding that’d have to be returned.
Only £6m odd.
BHCC demonises private landlords instead of helping them. Private landlords will continue to sell, reducing rental stock and putting even more pressure on the council.
Landlordism is a blight that should be eradicated. Whether or not it’s related to the overspend risk is debatable.
Nonetheless, here we are. Nice to see cycle lanes getting a mention too.
Guess we’re not allowed to breathe clean air or live in a house that is remotely affordable.
Sounds like a good reason to fund a CLT, buy up from bad faith landlords, and provide housing at affordable rents instead. Selling up is a problem if you don’t have a plan to make the most of the opportunity.
Stop spending money on cycle lanes, road layouts and green issues. UK is only approx 1% of the global problem. Yet we want to spend money we don’t have !!
Active travel has a lot of benefits beyond environmental. For example, a good cycle lane between residential and schools facilitates a safe route for children to travel to and from school via cycling.
Citation needed.
Fact – VG3 is going to cost the local taxpayer £6 million.
There is no tangible benefit except for a few of cllr Muten’s cycling buddies. In fact, the Council’s consultants said it will cause more congestion and pollution
It is therefore against the public interest to continue with VG3.
Sack Muten
Many purported facts here – could you quantity your assertions in greater detail please?
Yes Dear:
The cost of VG3 has now risen to £13m . BHCC got a grant of £7m. You do the math.
Muten is a puppet for Bricycles – he attends their events. Why was he spotted handing out leaflets and trying to canvass public support for VG3?
Keep denying it – everyone knows the truth
So true! Even the councils own report suggests there are NO benefits…..and they didn’t bother doing a noise or air quality study at all!
Are we still a City of Santury
How many vanity projects are there
How can we screw the motorists
1. No, we are a City of Sanctuary.
2. None.
3. Brighton is an imaginative and adventurous place – what did you have in mind?
🙏
Vanity projects, VG3, already admitted as being of low value for money with little or no benefit, therefore a VANITY PROJECT.
Huge if true.
Everyone knows the truth.
If this is true why are we renting public spaces for a few thousand pounds, so that private companies can make millions? Surely we need to at the very least be charging properly? For most of our public spaces we make less than 5% of the profits taken by promotors, so why not get an Events team who are a bit more commercial and a bit more interested in the city as a whole?