For council ‘austerity is far from over’ says Chowney

Council seeks your view on its budget proposals

  • Council set to cut ten per cent of its workforce
  • £1m of additional savings still required
  • Increasing demand on homeless budget

The clock’s ticking down on your opportunity to have a say on the borough council’s budget for the coming year.

Hastings Borough Council (HBC) has launched a consultation on two of its key documents for the coming year; the budget and its corporate plan.

Members HBC want to hear what you have to say about its vision for the year ahead and about how it hopes to fund its spending priorities.

Here we hear what council leader, Labour’s Peter Chowney, has to say about what he says is an ever more difficult task – balancing the council’s books. Later we’ll hear from Rob Lee who leads the opposition Conservative group on how he believes the council should fund its services.

Mr Chowney says: “The council has once again had to put together a budget for the coming financial year. That’s a task that gets harder each year – and more uncertain.

“Over the last ten years, the money available to HBC has reduced dramatically. We’ve lost over £55m in government grants cumulatively over that period, from a net budget of around £15m. We’ve been able to replace some of that by generating additional income, for example by purchasing commercial properties, which has raised over £1m to offset funding cuts. Nevertheless, many services we used to offer have gone completely.”

Laying out the background to the process of setting this year’s council budget Mr Chowney says: “This time last year, we were expecting a £1.75m deficit for the 2019/20 budget. Despite identifying over £300,000 in savings, the deficit has grown to over £2m, because of additional demands on the council.

These include:
• Increasing demand on our homelessness budget, with costs rising by £386,000 more than we’d expected (see later article on this);
• £100,000 loss of income from the West Hill Cliff Railway – this will be back in operation this spring, but has needed extensive, expensive repairs to get the 150-year-old structure back into working order;
• £82,000 lost income from house purchase land searches – you can do this online now, so fewer people request the information from the council and pay the ‘search fee’.

“We’ll have to cover the £1.75m deficit for 2019/20 by using reserves. We had set aside reserves to deal with emerging deficits, but this year all these reserves will be used up,” Mr Chowney says.

Hastings Borough Council wants to hear what you have to say about its proposed budget for the coming year.

Looking ahead to the 2020/2021 Budget he says: “Over the last year, a lot of work has been done to identify savings to reduce future years’ spending. In the end, we were able to identify almost £2m in savings and service cuts for the 2020/21 budget. That means a loss of around 30 posts – nearly ten percent of the total workforce. Those job losses will affect the council’s capacity to provide services and some services will cease entirely.” he says.

“We had thought that we’d ‘reached the bottom’ and that with those savings we would then, finally, have a balanced budget. Sadly, that proved not to be the case, because of the additional spending pressures that have emerged,
along with further unexpected cuts in our grants from central government.”

These additional spending pressures include:
• Continuing increasing demand on our homelessness budget;
• Repairs to the ‘inland cliffs’ the council owns, which have become unstable because of increased rainfall;
• Improvements to the Buckshole Reservoir dam.

Mr Chowney says: “Next year’s budget, and the full list of savings we’re proposing to make are now available for consultation on the council’s website “

Some of the larger cuts/savings HBC is proposing include:
• Reducing senior management posts (£260,000);
• Ending ‘live’ monitoring of CCTV cameras by the council – the cameras will still be monitored by the police and will still be recording, we’re the only council in Sussex that has additional monitoring carried out by the council (£150,000);
• Reducing revenues and benefits staff, as more Housing Benefit claimants are transferred to Universal Credit, resulting in loss of government grant;
• Restructuring the development control team (£104,000).

The proposed budget will also include an increase of two per cent in HBC’s element of Council Tax, equivalent to around ten pence a week for a Band D property, the maximum allowed without a referendum.

Income Generation
There’s an additional £100,000 income included in the 2020/21 budget, from commercial property purchases – that includes the full-year effect of properties bought during the current year, as well as potential new purchases: “We’ll certainly be looking out for commercial property purchases that could give us a good net return, to bring in more income,” says Mr Chowney.

There is also a growth item in the budget to create a new post to move sustainable energy generation projects forwards: “We’ll be developing schemes for ground mounted solar, solar panels over car parks and roof mounted solar panels on properties where we own the freehold.

“We haven’t allowed any of that income in the budget as it’s difficult to quantify. We’ll also be looking at the ‘commercialisation’ of council services, in particular our new in-house waste team, by, for example, offering trade waste collections to local businesses.”

Competitive Grant Funding
HBC has been very successful securing grant funding from the EU but EU schemes will disappear: “We’ll continue to bid for money offered for specific purposes by Heritage Lottery, Arts Council, Homes England, government departments, and others. This funding is useful for improvement projects that the council couldn’t possibly afford from its mainstream budget,” says the council leader.

During 2018, Hastings Council received around £10m in funding through this kind of scheme, with projects including the refurbishment of the derelict fountain above White Rock Baths to a series of employment and training initiatives from the CHART programme in the most deprived wards. However, this funding is only available for ‘extra’ projects – it can’t be used to supplement the council’s day-to-day spending.

As far as Capital Schemes are concerned Mr Chowney says: ” While the council is severely limited in its day-to-day revenue budget spending, it does not have the same constraints in its capital budgets.

“For revenue spending, the council can’t borrow to balance the books and can’t end the year in deficit. But there are, at the moment, no limits on how much the council can borrow for capital schemes – in other words, for construction projects and for acquiring land, property, or other assets, as long as it sticks to ‘Prudential rules’.

“These rules mean the council must have the means to pay off the loans it takes out to fund capital schemes. It can fund this either from its general revenue budget, not usually an option when we’re making such big cuts, or from income that will be generated by the capital scheme itself.

“So the council is developing a programme of ‘self-funded’ or grant-funded capital schemes to regenerate the town and produce more affordable
housing and employment opportunities.”

These ‘self-funded’ projects include:
• The White Rock and Bohemia Quarter project, to refurbish White Rock Gardens and create a new leisure centre and entertainment venue;
• The development of the ‘Lower Tier’ site on Bexhill Road to create 190 new sustainable homes;
• Construction of a new business start-up centre and business skills
training project in Hollington to create over 70 jobs;
• Redeveloping the Harold Place site as a restaurant (see later items on some of these projects).

Looking to the future Mr Chowney says: “At the moment, it’s not clear how we’ll cover the £1m gap in the budget that still remains and the future is not looking good.

“The government is intending to carry out a ‘fair funding review’ of local government, but we anticipate that this will divert money to county councils to boost spending on adult social care, rather than provide any more money for district councils such as Hastings. We also understand that there will be no additional money provided for local government, despite years of cuts – for councils, austerity is far from over.

“We’re not the only district council in this predicament – others have even bigger problems. Those in deprived areas such as Hastings, where demands on their services are greatest, have been particularly hard-hit. If councils aren’t properly funded in the future, they will simply no longer be able to function.”

Find the council’s budget and corporate plan here, you have until February 7th to make your comments and observations to HBC.

Have you listened to the latest edition of The Hastings Podcast? Follow the link below.

One thought on “For council ‘austerity is far from over’ says Chowney

  1. In a previous article about this budget and the accounts published, online only it would seem, is really quite a head banger. Few are going to peruse some eighty pages and absorb it and construct any questions and opinions on what the council has spent or intending to spend. I did some speed reading through it and that took about 20 minutes. Not being an accountant or knowing enough of what goes on with the walls of HBC a lot of it is difficult to comprehend.
    One of these reports that I can see will be largely ignored by the public. For reasons I have covered, not because they are not interested.

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