Countdown to bankruptcy? Council leader’s warning over city’s finances

Hove Town Hall
Hove Town Hall

The leader of the council has warned that the local authority could go bust in a few years if government cuts continue.

As Brighton and Hove City Council prepares to agree its budget for 2018/19 next week, Cllr Warren Morgan warned of the consequences of funding cuts, coupled with the burden of rising adult social care costs.

Cllr Warren Morgan, the leader of Brighton and Hove City Council SUS-161130-165515001

Cllr Warren Morgan, the leader of Brighton and Hove City Council SUS-161130-165515001

He said: “People have been warning about councils going to the wall for some time. Northamptonshire has gone bankrupt. Eleven or twelve, including Surrey, one of the biggest and wealthiest councils, are at the point that they are in trouble.”

Earlier this month Northamptonshire County Council announced it would be unlikely to be able to set a balanced budget for the next financial year, making it effectively bankrupt.

Cllr Morgan said: “We will hit that point between 2020 and 2025 unless there is some change in policy from government for local government and social care.

“I would stress to residents that in Brighton and Hove we’re not at that point yet, but it would remiss of me not to say very loudly that we will be in trouble if the government does not step in.”

Cllr Tony Janio, leader of the Conservatives on Brighton and Hove City Council

Cllr Tony Janio, leader of the Conservatives on Brighton and Hove City Council

This comes as the local authority looks to raise council tax by 5.99 per cent, and make £13m of savings in the 2018/19 financial year.

Cllr Morgan, the Labour leader of the council, said that by 2020, the council would have lost £100m of funding in a decade.

But fears that the council could go bust in the next few years were dismissed by the city’s Conservative leader.

Cllr Tony Janio, leader of the Conservatives on the city council, said: “Cllr Morgan’s rather hysterical outburst, where he has suggested that our city will go bankrupt in 2025, shows not that the city is in trouble, but that he is, from within his own Party, the trades unions and, more importantly, the members of the public. I wish that he would stop constantly putting down our city, blaming the Government, and just get on with the task he was elected to do.

“I, as leader of the Conservative Group, have taken a pragmatic view and offered Cllr Morgan the opportunity to discuss the key issues with him, instead of seeking any political gain, but sadly he has chosen not to do this. Labour’s incompetent management of the national economy left us in a mess when the crash came, and locally their chaotic Administration is a drain on our city. As usual, the Conservatives stand ready to serve in the interests of all. This simply can’t carry on – things don’t have to be like this.”

Cllr Ollie Sykes, the Green’s finance spokesman, said: “Cllr Morgan is concerned Brighton and Hove City Council will go the way of Northants due to central government cuts. He’s absolutely right to blame the Conservative Government for year after year of cuts to local council finances.

“But instead of looking at possibilities for generating more income, the Labour group seem content to pass on these cuts with little regard to how this will impact upon services further down the line.”

For more on Brighton and Hove City Council’s budget, click here.