Council Budget: Mind the Gap

That’s just Hastings Council’s part of the council tax bill - East Sussex County Council , Sussex Police and the Fire & Rescue Authority will make their own decisions about their share.

But this isn’t good news - it just means that our pessimistic predictions were justified. Revenue Support Grant to Hastings Council has been cut by 25% from the previous year. The government will cut this continuously until 2020, when it disappears altogether. For the current year, we’ve been able to use reserves to make ends meet. But reserves won’t last forever. Hastings Council’s net budget is around £16m, although the gross budget is about twice that. For 2017/18, there’s a £1.5m gap. And by 2020, this rises to around £3.5m.

It’s not just Hastings that’s affected. Many councils are having their budgets slashed, with local government suffering far bigger austerity cuts than the rest of the public sector. Some councils are reported to be close to running out of money, with no way of making ends meet.

The government has justified this by saying that councils will keep 100% of the business rates they collect - currently it’s 50%. But that isn’t true. There will be a system of tariffs and top-ups, to redistribute the business rates collected. At the moment, we’ve no idea how that will work - it’s likely that we’ll be allowed to keep no more of the business rates than we do now, perhaps even less. We’ll find out later this year.

So how is Hastings Council going to bridge the gap? One way is to generate income.

At the moment, Hastings Council raises around £12m, from rents from commercial property, car parking (although charges are frozen for the coming year), the crematorium, beach chalets, planning fees, land searches, and so on. That’s a lot for a council of our size. But we want to explore new ideas, such as setting up a company to develop housing, green energy generation, or trading services commercially. This could mean bringing outsourced services back in house, to take advantage of trading opportunities.

We’re looking at our building cleaning contract at the moment. We will also continue to improve service efficiency, making more available online, and using IT systems to streamline internal processes.

However, with government grant cuts as big as this, further cuts to services and job losses are inevitable, from 2017/18 onwards.

We’ll be changing to a different kind of council, doing things that can be funded from external grants from the EU and other sources, or new services that pay for themselves.

We remain optimistic about the future, about how we’ll be able to continue to transform and regenerate our town, but it’s not going to be easy. There are still tough times ahead.

This budget will be out for consultation until February 12th, following which the council will adopt a budget at its meeting on February 24th.