The council is facing a budget shortfall of £40 million in the next financial year – and a £95 million shortfall over the next four years.
The figures are being fuelled by inflation, more people in need of emergency housing, the burgeoning cost of social services – for children and adults – and rising demand for home to school transport.
The bleak picture was spelt out by the Labour deputy leader of Brighton and Hove City Council, Jacob Taylor, in a meeting yesterday (Thursday 17 July) at Hove Town Hall.
He told the council’s cabinet that the forecast shortfall next year – the 2026-27 financial year – took into account an expected increase in income totalling almost £17 million.
Councillor Taylor said that inflation was expected to add almost £10 million to the council’s costs while temporary housing was forecast to add about £12 million.
The extra cost of adult social care was predicted to be about £9 million, children’s social care £4.7 million and home to school transport £1.2 million.
The outlook in the current financial year is also posing challenges, with a potential overspend of £15.5 million on the cards. The forecast at the same stage of the past financial year was about £10 million.
A report to the council’s cabinet said that pay awards were coming in higher than the budget assumptions because of persistent inflation while budget savings targets were harder to hit.
The report also said that economic conditions were affecting “external provider costs” as well as recruitment costs while reducing many sources of income – and these were all proving had to predict accurately.
A case in point was the actual cost of temporary housing compared with the budget. The council block books about 400 places a night and spot books almost 200 more.
Spot booking tends to be more expensive but the need is running at a much higher rate than expected. This year alone, the spot-booking overspend is on track to top £5 million.
Councillor Taylor said: “(The) numbers of people presenting as having housing difficulty and seeking help from the council are rising.
“And the unit costs have also been rising at the back end of the last financial year and into this year which means we have a significant forecast overspend in that area.
“This translates into the pressure we then see next year. It’s a somewhat gloomy position but we have to grasp this and start working on it.
“Of course, we’re already working on it in the background with officers to try to work on these difficult pressures that we’re seeing.
“Why do we have such pressures on temporary accommodation? Because we have a colossal and scandalous housing crisis in the country and particularly in this city – one of the great political and economic failings of the last – probably – 100 years.
“We are a rich country, the fifth or the sixth richest country in the world, and we have a scandalous, ludicrous, disgusting position where we have hundreds of thousands of families in temporary accommodation.
“They are homeless – a ludicrous position for us to have got ourselves in because of failed housing policy over the last 15 years.”
He said that the government had announced an increase in funding for affordable houses – £39 billion over 10 years – with an emphasis on social housing.
This marked a significant change, he added. Councils were now building again and buying back former council homes.
Labour councillor Gill Williams, the council’s cabinet member for housing and new homes, said that the situation was gloomy but the council’s eyes were “looking up not down”.
She said: “We are facing massive problems and we can’t deny it. Last week we placed 33 people in temporary accommodation – 50 per cent more than our weekly average.
“This is what we’re dealing with. This is crisis level. We’re not wasting money here. We’re keeping people off the streets and they’re just pouring into us.
“Just dealing with it is a massive pressure but, hopefully, looking into the future, the future is not gloomy. It is bright because we have these opportunities for regeneration.”
£7m of this is taxpayer contribution to VG3.
How much is the writeoff for the I360 ?
About £1.5 million a year until the debt to the board is paid off.
Let’s not forget the council are also still paying off PFI debts for the Jubilee Library and have about £150 million left to pay on the Veolia / waste loan. At least with the library and waste loans the council will still own ‘assets’, but with the i360 they all but gave the ‘asset’ away which was imo really short-sighted thinking and a bad deal for residents.
Even if Jacob and co felt the i360 itself wasn’t profitable itself in the future, the land alone was worth much more than they gave it away for and had the potential to bring in significant revenue if the whole thing was managed better. Personally, I think the whole thing was handled attrociously by the administration.
Also important to remember we have a Labour Govt. So if Labour councillors cry locally there is no money, it’s their collague’s responsibility in Westminster to address it – yet they just seem set to continue Tory austerity.
£1.84 million of this was taxpayer contribution to VG3.
Remind me which party made Brighton a “city of sanctuary”?
Remind me which party created the situation that required Brighton to be a city of sanctuary?
Articles like this, with figures like these, mean very little to the average reader when you give no indication of the size of the overall revenue budget.
I think it is around one billion – and so the dramatic 40 Miillion headline is in fact a much more manageable (but still worrying) 4 per cent of the total.
Yeah, about £960 million. And only 25% is controllable by the council as well as net revenue.
Send people to visit Kent council where the reform council has been able to bring the finances under control.
Are you referring to what was already in place by the previous Conservative government?
They also have their own deep seated problems, including a £1.1 billion over SEND legal cases with a 98% loss rate, showcasing that Reform not only does not care for children with disability, but is actively trying to harm them through that mismanagement.
I’d be a bit careful of using them as an example, especially when it appears one gets suspended every other week.
Reform is the way forward
Go to next but one article:
Council to fund £7m swimming pool. Are we living in the land of clouds and cuckoos?
If your credit card is maxed out you stop spending only the idiot gets another card and carries on spending.
Unfortunately, that’s not a fair comparison, but I get the sentiment. Reasonable to think there’s a return on a swimming pool though, so it’s fine. Movement of money is arguably far more important. You can’t pay off the world’s debts with the world’s wealth, after all.
How many more times is the council tax going to be increased because of the inadequacy of these awful out of date hippies! They can’t keep expecting the people of Brighton and Hove to pay for their socialistic out of date ideas which is clearly funded by our hard earned money. I am currently paying £3,000 a year in council tax which works out £300 a month. On top of my £200 gas and electric bill, I am paying £500 a month for just two of my many domestic bills! How can those stupid councillors think this is ok!
How come you pay so much? I pay £250 per month in Council Tax and £125 per month for gas and electricity (including electricity for the car). Sounds like you need to move to a smaller, cheaper to run house.
It’s about a band F, I’d imagine. Also sounds like he’s got a really bad house if he’s losing that much in electric and heating. I know commercial blocks with less.
I don’t have a bad house! The cheek of the pair of you! I live in an ultras modern state of the art house in Kemptown seconds away from the seafront ! It happens to be also a very big three bedroom house with a huge hallway . It’s well insulated and triple glazed . It’s called the UK being a rip of country to live in!
Oh, that makes a lot of sense. Those buildings will never be energy efficient. If your place is truly ultra-modern, you’d expect better energy efficiency; but it’s still very possible to have high fixed costs if the property’s large, open-plan, or heavily glazed.
Triple glazing sounds impressive but often adds more in cost than it saves; research states it’s only marginally more efficient than good double glazing, and can reduce solar heat gain in winter, meaning higher heating bills. And in you’re seafront-facing, meaning even a modern build can struggle to hold heat due to the exposure and wind-chill factor.
So yeah, you’ve kind of solidifed my assumption here.
Sounds like you need to do one!
Why not ask Central Govt for more money?
Labour govt are hardly going to say no to a Labour council.
Central government is having to borrow £15-20 bn per month to balance the books. It’s unlikely to be handing out money to local authorities, whatever their affiliation.
At some time soon we are going to have to admit that our country is not as wealthy or influential as it once was. With capital easily transferred to lower taxing countries, and those countries inviting the wealthy to live there, the option of ‘tax the rich’ is not necessarily going to generate the money to pay our debts and invest in services.
And before someone suggests expropriation and selling off of the property of the wealthy as a means of raising revenue, remember that property values vary and as soon as there’s a sniff of expropriation, property values will plummet.
I don’t buy that narrative. A fairer redistribution of wealth is so clearly the right thing to do. The fable of a massive exodus is greatly exaggerated; it’s not reflected in non-biased research or how it has happened in other countries.
Public Council finances do not appear to be in strong and stable hands which we can trust.
Either our city has money or is near-bankrupt. Which is it?
The pendulum seems to swing from one extreme to the other on an almost-weekly basis.
And why are unnecessary projects not being cut rather than statutory services if belts need to be tightened?
How much is in the Reserves and the Unallocated Fund?
How much CIL tax has been collected for Community investment in the past nearly 5 years since it was introduced?
We need to demand complete transparency.
Perhaps there could be a few Proceeds of Crime cases against former city leaders responsible for the i360.
Because one is a current situation, whilst the other is a forecast. You need to carefully read the article before saying something silly.
The council spot purchases slum hostel accommodation for people to stay in the same place for months …. pay 4-start hotel rates for slums. It is outrageous and all part of the troubling cosy relationships between council officers and slum HMO landlords. It is a complete racket and has been going on for years in plain sight.
Crazy amounts of money goes into it. And there’s a lot of truth to what you’re saying; consider that there are in the region of 70 different emergency housing providers in Brighton. I want to see an alternative provider, a true non-profit that partners with BHCC to get that cost down.
While they do use public services, local government funding formulas and university contributions are designed to account for this.
14% of the city pay no council tax as they are students but use the services paid by the rest. This will put a strain on the finances.