Council budget black hole ‘worst in 25 years’

The black hole in the city council’s budget is “the worst in 25 years” despite efforts to shrink it, a councillor said today.

The situation was branded “lamentable” by Green councillor Ollie Sykes, who told Brighton and Hove City Council’s cabinet he intends to call in the working budget for more scrutiny.

Papers put before today’s cabinet meeting (Thursday 15 October) show a forecast overspend of nearly £24 million in the general budget plus £19 million in further risks.

But Labour’s finance lead hinted the council expects a government bailout of £30 million to help it balance the books.

The Housing Revenue Account, made up of council tenants’ rents, has a predicted overspend of £1.1 million and the Dedicated Schools Grant is expected to go £7.3 million in the red.

The targeted budget management forecast graph submitted as part of the report to cabinet shows the overspends going up, rather than down as they have done in previous years.

Councillor Sykes said: “This Labour administration has clearly lost control of council finances. We are in a worse position than at any time in the past 25 years. Worse than under Covid, when income fell off a cliff.

“Labour is overseeing a worse position than all its neighbours.

“That is in terms of overall projected revenue budget overspend, overspend on adults services and children’s services, and also in terms of financial control and delivery of savings.”

Councillor Sykes argued Brighton and Hove is performing worse than neighbouring councils East and West Sussex, Southampton and Portsmouth when it comes to projected overspend and particularly in pressure areas of adult and children’s social care.

Council deputy leader Jacob Taylor said East Sussex County Council may look better off but had already “baked in” £56 million into its current budget of the £70 million it received in exceptional financial support from the government last year.

The report to cabinet confirmed exceptional financial support – or a bailout – of up to £30 million from the government is required to achieve a balanced budget.

The Labour finance lead said Brighton and Hove is currently achieving 71 per cent of its planned budget savings.

But, Councillor Taylor said the savings are being overtaken by the demand, complexity and costs of the “core care budget” particularly adult social care.

Demand for community, residential and nursing care is above the original budget predictions, with a forecast overspend currently standing at £12.5 million.

A recovery plan for adult social care comes to £10 million with £5 million achieved and a further £3.4 million anticipated to be achieved.

Councillor Taylor said the government is now trying to address the main causes of financial instability in local councils.

These are the cost of homelessness and temporary accommodation, adult and children’s social care and special education needs and disabilities (SEND) budgets.

He said: “We are now faced, as a council, with options and the implied criticism from the opposition is that they would take a different option.

“We could do one of two things, we can cut our frontline services to the bone this year and next year, we can close all of our non-statutory services if we wanted to do that, and try to get to a balanced budget both in year and in future years.

“What would that do to the city? What would that do to our communities?

“We’re not going to do that. I don’t think the government really expect councils to do that.

“We’re not going to shut all of our libraries, all our nursery provisions, stop refurbishing our playgrounds, to try and hack back to a balanced position.

“What we’re going to do is set out a transformation programme linking with the changes made by the government to get the council in the medium term into a balanced financial position.”

Councillor Taylor said the exceptional financial support would be a bridge to get to the balanced point.

Council leader Bella Sankey said the situation is being constantly monitored and taken “exceptionally seriously”.

She said: “I think it’s ironic really that the Greens have come here today to suggest that we have lost control of the council’s finances.

“That is, sadly, something that they did when they were in administration and something we have sought to reverse in our period of administration.”