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Local authority warns it is in ‘financial peril’ for next year

A council has warned it is in “financial peril” and will have to cut millions of pounds in spending next year to balance its books.

Brighton and Hove City Council leader Bella Sankey said the authority has a £31 million budget gap to meet for next year after the government’s autumn statement fell “disastrously short” on meeting inflation costs and rising demand for services.

Ms Sankey said: “The council’s finances are in an extremely perilous position.

“There was absolutely nothing in the autumn statement to provide relief for this council or local authorities who have faced a decade of heartless central government austerity, or any real-world financial help for struggling families.

“Demand for our services is increasing, especially in key areas like adult social care, children with special educational needs and disabilities (SEND) and homelessness, which is putting pressure on other services.”

She said a government fund which allows the council to help struggling households pay for food, energy and other essential costs is being cut.

The Labour council leader added: “We’re being forced to look at every one of the 400 services we provide and start the extremely difficult process of deciding what are priority services and what aren’t.

“To put it bluntly, the less money we have the less services we can provide.”

The warning comes as Nottingham City Council became the latest authority to issue a Section 114 notice, effectively declaring bankruptcy on Wednesday, November 29, blaming its financial problems on government funding and rising demand for services.

Brighton and Hove City Council’s leader has said the council faces making cuts to services (Alamy/PA)
Brighton and Hove City Council’s leader has said the council faces making cuts to services (Alamy/PA)

Nottingham City Council is believed to be the third authority to issue a Section 114 notice this year, with a total of 12 such reports made since 2018.

Ms Sankey said the council is not in this position yet, but is in financial peril.

The east Sussex council chief added: “While we await the final detail on the local government settlement, we will almost certainly have to find millions more savings next year than planned because the government has chosen to ignore the crisis in local government funding.

“I want to reassure all of our residents we are doing everything we can to make service improvements while balancing the council’s budget, which is a legal requirement.”

A staff hiring freeze at the council and finding savings within this year are among some of the measures trying to keep the authority’s finances afloat.

A spokesperson for the Department for Levelling Up, Housing and Communities said: “Local authorities have seen an increase in Core Spending Power of up to £5.1 billion or 9.4% in cash terms on 2022/23. Councils are ultimately responsible for the management of their own finances, but we stand ready to talk to any council that is concerned about its financial position.”