Labour’s desperate smoke and mirrors budget

At a special budget-focused meeting of the council’s Place Overview and Scrutiny committee on Monday 19 January, I questioned the Labour deputy leader and finance lead, Councillor Jacob Taylor.

I asked him whether he was considering the use of exceptional financial support (EFS) in his discussions with ministers about the financial settlement for local government.

Councillor Taylor didn’t address that point. Looking back, this is surprising, as it must have been around mid-January when our Labour council administration decided it did in fact need to ask for an emergency loan of £15 million.

Surely you wouldn’t forget something like that? The unprecedented local equivalent of James Callaghan, the former Labour Chancellor and later Prime Minister, going to the IMF in 1976 to ask for a bailout?

Unfortunately for us all, this budget round is full of nasty hidden surprises and dirt swept under the carpet.

It’s only when you chew forensically through the 500-odd pages of narrative and tables that the extent of Labour’s sleight of hand and own goals become clearer.

Sleight of hand: in-year position. Three years ago, the council budget was overspent by about £3 million and we had to use reserves to meet the gap. It was a bad position to be in and we Greens have never heard the end of it despite the fact that it was a joint Green-Labour decision.

This year, the budget is forecast to overspend by £4.5 million. But hang on – that’s only after we’ve used about £4 million of reserves. So the real in-year gap between budget and spend will be more than £8 million.

It’s not just a bad position to be in, it’s unprecedented and catastrophic. Because to meet the remaining gap this year, we need to use money raised from selling buildings. That money should be going towards improving our city.

Own goal: planning legal costs. This is mentioned in the budget papers as an “in-year pressure’” But no figure and no details are given. Mentioned alongside another nasty surprise this year worth about £4.5 million in extra costs, the figure must be big. Maybe a million, maybe two?

So what was the big planning decision this year that might have led to such costs? We can only guess that this is about the Brighton Gasworks development, in East Brighton, which was rejected by our Planning Committee and subsequently granted on appeal.

Now, the Planning Committee is quasi-judicial and supposed to be apolitical and all planning councillors know the financial risk of voting against a contentious application that might be allowed on appeal.

But the stakes are far higher with a development of that scale as the legal costs for both sides go up exponentially.

Why aren’t we being given this detail? Labour have a majority on the Planning Committee. Were there local political reasons for planning councillors to vote against this development?

Glossing over the cracks. What’s clear about this budget – and an absolute tragedy – is that this is a desperate time for our council financially.

Services are being cut across the board, costs are rising for residents in council tax and so are a whole range of fees and charges.

This is the first time the council has needed to borrow from the government to meet budget gaps and the first time also we have had to use money meant for investment to plug short-term shortfalls.

In its public statements about the budget, Labour says the emergency financial support is a temporary measure to “create the headroom required to make long-term improvements … supported by transformation programmes”.

What they don’t say is that this council has been running transformation programmes since the first manifestation of council austerity, back in the 2010s. Will we still be waiting for the results of transformation in another 15 years?

What the Labour council aren’t telling their government is that there is not enough money in the system for councils and that Brighton and Hove’s financial settlement does not take into consideration the depth and cost of our housing crisis.

There’s a gap between rhetoric and reality in Labour that’s getting wider.

Greens would, initially, have to live within the same settlement constraints as Labour. But at a national level, we would push harder for simple policy measures that would reduce the pressure that councils are under because of the housing crisis.

Those changes would include ending the council house right to buy scheme once and for all.

With respect to short-term lets, which have removed so much affordable private housing from our city, we would act autonomously as far as possible and also push for full nationally mandated regulation and control.

And we would advocate for increasing further the second home council tax premium, along similar lines to that seen in Wales. Greens would work closely with other councils to push for a better deal.

Most importantly we would be more open and honest about our circumstances and we will fight tooth and nail for our city and for our council in public and behind closed doors.

Councillor Ollie Sykes speaks on finance for the Greens on Brighton and Hove City Council.