Hastings Borough Council ‘is not running out of money’ says finance chief

Hastings Borough Council is set to make almost half a million pounds of additional savings this year, as it seeks to prevent its reserves from falling below minimum levels.

Monday, 22nd November 2021, 10:10 am
Muriel Matters House, Hastings Borough Council offices. SUS-210823-125051001

At a special cabinet meeting on Friday (November 19), council leaders agreed to make further savings of £465,000 this year, in an effort to prevent general reserves falling below £6m.

These savings, which would include a number of hiring freezes and cut hours at the council’s contact centre, come on top of the £446,000 of savings already agreed in the budget.

Finances in ‘relatively good place’

Despite the savings, cabinet member for finance Peter Chowney argued the council’s finances remained in a relatively good place.

He said: “It is true that many other councils are getting in quite severe financial difficulties. They have had their statutory letter from their own chief financial officer telling them that they are running out of money.

“That is not the case here and anyone who has actually read this report would realise that. As it says, the problem we are facing is that our [general] reserves we have set as council shouldn’t go below £6m. 

“It looks like it will go below £6m, at least temporarily, in which case in the future we will have to bring it back up again. But that doesn’t mean we are running out of money.

“If we did absolutely nothing at all. If we did nothing, if we made no further savings just spent at the levels we are, we would run out reserves yes, but in about three years time. 

“We are not there yet and we don’t intend to be there yet, because as this report points out there are a whole range of savings and actions we can take to address in particular this crisis which has occurred in the current year.”

Labour accused of financial mismanagement

However, the Conservative group painted a very different picture, labelling the savings as the result of “financial mismanagement” by the council’s Labour leadership.

In a statement released ahead of the meeting, Conservative group leader Andy Patmore said: “This is a mess and what is frustrating is that it is a mess that could have been avoided but political dogma and inexperience among senior councillors have got in the way of sensible decision making.  

“It seems every project HBC touches goes over budget and runs late. The latest fiasco of spending over £1 million to renovate six one bedroom flats in York Buildings is a prime example of their financial mismanagement. 

“In 2018 then Conservative group leader Rob Lee described the council’s borrowing plans as ‘a ticking time bomb of over extended borrowing ’ and said that HBC was spending too much money on external consultants and was ‘throwing good money after bad’ on a range of vanity projects.

“We take no pleasure in seeing the council in such a desperate situation and we’re reluctant to say ‘we told you so’ but we did. Had HBC’s leaders heeded even just a little of what we have been saying for years then this situation could have been avoided.

“The Labour administration will blame unexpected costs as a reason for running out of reserves but the truth is the council have not added to their reserves, which are there to cover unexpected costs. Instead, they have used their reserves to balance the books, robbing Peter to pay Paul.”

Unexpected one-off costs

According to council papers, much of the draw on reserves this year was due to unexpected one-off costs, such as the closure and repair of the West Hill Cliff Railway (which cost around £235,000) and costs associated with a dangerous structure on Battle Road (which cost the council around £525,000).

However, it was also acknowledged that the council’s homelessness spend is predicted to rise by around £457,000 in this financial year.  Officers said this would equate to a £931,000 increase in a full financial year, but warned that this could cost even more next year as living costs increase.

Separately, spending on support for rough sleepers had also increased by around £220,000 above what was originally budgeted for.

Problems finding accommodation

Cabinet member for housing Andy Batsford said the increase in homelessness spending was not the result of an extreme increase in the number of households becoming homeless, but was down to people staying in temporary accommodation longer due to the cost of finding new housing.

He said: “People across the town will recognise the difficulty of finding accommodation even if they are not homeless as the actual cost of rented accommodation has gone through the roof. 

“It is the same with our people in temporary accommodation. There is absolutely no point in moving a family or an individual who is in temporary accommodation at the moment into a new rented place when that is totally unaffordable for them in the long term. 

“Our officers are working tirelessly to try and find options and ideas about how we move people on to proper sustainable accommodation, but at the moment this is costing us and councils across the country countless sleepless nights.” 

Cabinet members went on to argue the situation required action from government, either by increasing housing benefits to cover rents or capping rents. They also argued for further funding for affordable housebuilding on a national level.

Following discussion, the savings were agreed by cabinet. Further discussion is set to take place at a full council meeting in December as part of the budget setting process.