'Stark' warning over finances at Hastings Borough Council

In a report discussed by the council’s cabinet on Monday (September 5), the authority’s chief finance officer Kit Wheeler has warned that he may be forced to issue a s114 notice unless the council is able to improve its financial position.

By issuing the notice, something he would legally be required to do if the council was unable to balance its budget, Mr Wheeler would effectively put a stop to any non-essential council spending.

While warnings over the council’s finances are not new, Mr Wheeler said his report was intended to focus minds and ensure Hastings residents were aware of how serious the situation had become.

He said: “The report puts into very stark context where we will be in a very short period of time if we don’t address what is a very challenging financial situation.

“One of the areas that is causing us the greatest concern is the housing and homelessness issue. We have set up a task force to identify any potential savings, any efficiencies that can be made in that area, but ultimately we are having to pay out an awful lot of money that we have not previously had to pay out for for a whole host of reasons which are outside of the control of our council.

“That is quite crippling to us financially. It is something we are trying to address through a whole range of initiatives and there have been savings identified as part of that practice.

“Unfortunately for us, as fast as we are working to find those savings, there are costs that are still increasing.”

Mr Wheeler said inflationary pressures (particularly utilities costs) and a new staff pay award were also adding to the council’s financial woes. When put together with the homelesness costs, he said, these effectively wiped out the savings — of around £1m 2021/22 — already identified by the council.

He also said the council was largely ‘reliant’ on government funding, which had not been enough to cover its costs.

Mr Wheeler’s report went on to lay out a number of recommendations as to how the council should proceed if it wants to avoid the issuing of a s114 notice. These recommendations (some of which are already underway) were unanimously agreed by cabinet members.

They include plans to undertake an ‘urgent review’ of all the council’s fees and charges, with any changes to be brought in as soon as legally possible. The council would also review its capital programme, with any new schemes requiring borrowing to be restricted unless they would reduce budget pressures.

Officers, meanwhile, will bring forward plans to curb unplanned cost increases as well as both reduce core spending and increase income.

The council will also ask the Local Government Association (LGA) to organise a finance peer challenge in early Spring 2023.

A further, more detailed, financial report is set to come to the cabinet next meeting in October.