Financial Challenges As Worthing Council Reports '13 Years Of Underfunding'

A forecasted £1.8 million overspend by Worthing Borough Council has left services and assets under review.

The council’s cabinet reported the figure to a meeting of the joint strategic sub-committee on September 19, for the 2023/24 budget – about a 12.9 per cent overspend of the set budget.

It followed a £2.1million overspend in the 2022/23 budget, where the council ‘narrowly’ avoided bankruptcy by using money from reserves, reducing them to £300,000 which is now proposed to be used for this years budget.

Council leader Beccy Cooper (Lab, Central) said years of ‘poor handling’ of the council by the previous Tory administration and cuts in funding from national government, along with homelesseness and the cost of living crisis, were contributing to ‘increasing pressure on reducing resources’.

She said:

“Worthing Borough Council, alongside many other Local Authorities, is facing financial challenges, thanks to 13 years of underfunding from this national government.

“For 13 years, demand for front-line local government services has increased as our communities have seen their own incomes reduced and the price of living increase.

“We are currently undertaking a council-wide financial review, analysing all aspects of our spending to make sure that we are working as effectively and efficiently as possible.”

Elizabeth Sparkes (Con, Offington) said overspending and ‘plundering’ of the town’s reserves were causing financial instability, saying the Tories had left the council in a ‘strong and robust’ position before losing power in 2022.

She said:

“It is unbelievable how the Labour administration have decimated the council’s financial stability in such a short space of time.

“The Labour Party has has undermined previous projects, for example the deal agree on the redevelopment of Teville Gate – their refusal to work with the agreed partner has cost the council hundreds of thousands of pounds.”

“It is very convenient for them to blame the government for lack of funding but local authorities were asked in 2018 to fund their own services, which the Conservative administration had successfully done for five years before Labour ran the council’s finances into the ground.”

After Birmingham City Council went bankrupt, leading credit rating company, Moody’s Investor Services, published a report of 20 more councils in England likely to default, rating Worthing as the fifth with a debt-to-income ratio of 14.4 times.

Dr Cooper said the ratio did not account for commercial income and was ‘misleading’. She said:

“Including all income the ratio is 4.4, reflecting the managed and responsible approach taken by this council towards borrowing.”

“Our financial challenge is not located in the amount of borrowing that we currently have – housing spend, energy price increases and inflation are challenges that we face in our revenue budget.”

Sale of the council’s assets and digitalisation of its services, the leader said, would hopefully help rebalance the budget in the coming year, but noted it could only sell assets once, and the following 2024/25 outlook ‘remains very difficult’.