Brighton & Hove Finance Chief Grilled Over Budget Gap

A senior Brighton and Hove Labour politician has defended the council’s handling of its finances in response to questions from a candidate in the local elections in May.

Independent candidate Laura King said that Brighton and Hove City Council faced a £70 million “budget gap” in the next few financial years.

The number was taken from an auditor’s report – and in the coming financial year alone, the budget gap is forecast to be £31 million.

Deputy council leader Jacob Taylor said that the cost of providing services was going up faster than the income from government grants, council tax and business rates.

In those circumstances, the council has to reduce spending, including by cutting services that are not required by law, or it has to find ways of bringing in more income.

Ms King asked:

“We are constantly told this Brighton and Hove City Council is short of money, yet the budget for 2023-24 is £895 million. How is this not enough for the city’s upkeep and goods and services delivery?”

Councillor Taylor said that the council had a gross revenue budget of almost £900 million but it included money that was “ring-fenced” such as the “dedicated schools grant” of £193 million.

Most of the money was earmarked for services that the council is required to provide by law – known as statutory services.

The council operates a general fund to pay for hundreds of statutory and non-statutory services – and Councillor Taylor said that the net general fund was about £250 million.

He said that that was the sum under the council’s control and from which it had to deliver many of its statutory and non-statutory services.

Councillor Taylor said:

“What we’re facing next year in Brighton and Hove is what we call a budget gap of £31 million.”

Roughly speaking, he said, the council expected to have to spend about £53 million more on the services that were already being provided – but would receive extra funding of only about £21 million.

He said:

“That leaves us with a gap that we’ve got to fill … I guess the thrust of your question is are we wasting money as a council on not doing things efficiently?

“A huge focus of the current budget-setting process will be to try to deliver things better – more efficiently – so that we can reduce costs and keep delivering services.”

The Labour finance chief’s answer foreshadowed an opinion column in the Sunday Times yesterday by Robert Colville, director of the Centre for Policy Studies think-tank.

Among other factors, he highlighted the rising cost of four important areas of spending – adult social care, housing homeless people, children’s services and school transport.

He wrote:

“All four of these are not only very expensive but subject to strict statutory duties.

“If councils don’t provide them, irrespective of their wider financial position, they will be taken to a court or tribunal. And they will lose.”

After Councillor Taylor’s initial answer, Ms King asked whether it was time for the council’s chief finance officer to issue a report known as a “section 114” notice.

This would signal that the council was, in effect, bankrupt – or unable to pay its bills – a position that five councils have found themselves in over the past year alone. Others have said that they are at risk of bankruptcy.

If the chief finance officer issued a report, under section 114 of the Local Government Finance Act 1988, the council would not be able to spend money unless the finance officer permitted it to do so.

But Brighton and Hove City Council was not in this position, Councillor Taylor said, although its financial position was serious.

Ms King also asked whether the current leadership of the council should step down “to make way for a local residents’ shadow council more able to manage the council’s finances”?

Councillor Taylor said that replacing the elected council with some other body – “presumably not elected” – was a novel idea.

Cost of Brighton & Hove services 2023/24

Where the money comes from 2023/24