Setting the Council Budget and Council Tax 2023/24

The council has today released a report on its proposed finances next year and how it will fund the 700 services that residents, visitors and businesses of the city see or use every day.

The report, being presented next Thursday 1 December to the council’s Policy & Resources Committee, shows high inflation, a weak economy, the cost-of-living crisis and government cuts in real terms to our funding are having a major impact on the council’s finances.

The council’s budget for 2022-2023 was £842.1 million, but with a projected budget shortfall of £19 million next year, more cuts and savings will be needed to ensure the council can balance its budget and remain financially viable.

More than a decade of austerity

The shortfall comes after more than 12 years of government cutbacks to our finances that have seen more than £100 million wiped off our annual funding.

The council is not alone in struggling financially as virtually all local authorities throughout the country are facing the same issues.

Senior officers at the council are working hard to find more savings in the services they deliver but are warning very difficult decisions lie ahead.

The report includes a number of areas where savings can be made to ensure next year’s budget is balanced, but these are at present draft proposals, with final decisions made at the ‘Budget Council’ on Thursday 23 February next year.

This includes the potential, announced in the recent Government Autumn Statement, to set council tax to a maximum of 4.99% to raise more funding to pay for the essential city services our communities need.

Council leader Councillor Phélim Mac Cafferty said: "Central government cuts over the last 12 years have seen our annual funding reduced in real terms by more than £100 million.

‘Demand for services outstripping resources’

“On top of the additional pressures created by the cost-of-living crisis, the rising cost and demand for council services is rapidly outstripping the resources we have available.

“These central government reductions mean we simply don’t have the resources to do everything we want to do. Sadly it is inevitable there will be an impact on the services people rely on.

Cllr Mac Cafferty added: “Public services have for too long been under-valued and squeezed, but in the current environment we are all realising their true value in underpinning fairness and equality by providing essential services and support to the fabric of our society.”

Our 700 services cost more than £2 million a day

It takes more than £2 million to run our services every day for the city’s population of almost 300,000 people, and the costs are rising.  

The Autumn Statement appeared to announce significant increases in funding for local government.

But for Brighton & Hove, this will amount to around £20 million. This is compared to an enormous increase in costs of £39 million, which means the council is currently predicting that £19 million cuts and savings must be found.

‘Biggest challenges we’ve ever faced’

Deputy council leader Councillor Hannah Allbrooke added: “The financial challenges we’ve faced this year and will face next year are among the worst the council has ever seen.

“We need to start talking now about the difficult decisions we need to take to make sure we’re spending the council’s money on the services which are needed most and are most important to the city.

“This will include our staff, who have worked tirelessly over the last couple of years, looking at every area to see where saving can be made, while we continue to prioritise services for our most vulnerable residents.” 

‘First step in the budget process’

Councillor David Gibson, joint lead councillor for finance, said: “This is the first step in a challenging budget setting process for the council. These proposals will not only evolve, but further proposals will also need to be developed before the whole budget package is presented to all councillors in February. 

“The months ahead will involve officers working with councillors to explore more ways to close the budget gap, while funding the essential services the city needs.

“We are facing our most difficult year yet, as are many other councils across the country, but we are working hard to balance the budget by taking the difficult decisions we need and progressing the council’s vision of a fairer city and a sustainable future.”

‘Government funding will not cover the gap’

Councillor Tom Druitt, joint lead member for finance, said: “With the enormous rise in the cost of providing services and increased demand for them driven by the cost of living, the council is in a very precarious position.

"Central government funding will not cover the gap and so, once again, the only options left will be through council tax, fees and charges or further cuts to services.

“This will need careful consideration to ensure we minimise cuts to services and support that, if removed, would ultimately cost us more in the long run as people and households are increasingly affected by economic conditions.”