A FUNDING gap of almost £13 million continues to confront East Sussex County Council following limited help in the national budget, cabinet members are being warned.
The Government’s national budget statement on 30 October signalled likely extra costs for local authorities which may cancel out the benefits of some extra funding announced at the same time.
No extra money has been allocated for high-cost areas including children’s social care and home to school transport which are significant factors in the steeply rising costs facing councils.
The council forecasts an annual funding gap of £57 million for the financial year 2025/26. A report to cabinet ahead of its meeting on Wednesday 13 November warns any financial benefit from the national budget: “is likely to fall significantly short of the current projected deficit”.
Further savings of £12 million are being proposed by the council to help close the funding gap. They are in addition to 12 proposals the council is already consulting on, mainly in reducing and modifying adult social care services.
The new proposals include reviews and reductions in a range of services, a cut in staff numbers, an increase in on-street pay and display parking charges and changes that should result in fewer high-cost placements for children in care.
Proposals also include plans to close or rent out parts of County Hall to reduce running costs and generate rental income.
The potential savings from the latest proposals, and those currently out for public consultation, total around £16 million. The initial £57 million deficit would be reduced by the £16 million savings and by a further £28 million if funding assumptions are realised.
The cabinet report suggests the overall impact of the national budget on East Sussex may be close to nil.
The report explains: “There was welcome acknowledgement of the specific issues driving pressure on local authorities and the need for reforms in key areas, including increased focus on prevention. This recognition was accompanied by some short term additional financial support, particularly for adult social care and Special Educational Need and Disability (SEND).
“However, increases to the National Living Wage and National Insurance paid by employers will impact on our providers and the costs of commissioning services, particularly in the care sector, and higher than expected inflation will affect costs across a range of services.”
Cabinet will be told that the council needs to study the details of the provisional/draft local government finance settlement when it’s published in December and look at all options to ensure it can deliver a balanced budget, including further use of its rapidly diminishing reserves.
The report concludes that the council’s financial position “continues to be highly challenging, despite indications of some additional national support”, and commits the council to continue efforts to press central Government for a better funding deal.
In particular, national plans to ‘target’ an extra £700 million of support across the country could penalise East Sussex unless the county’s areas of deprivation, its older population and smaller economy are properly recognised.
The full Cabinet report can be viewed at https://democracy.eastsussex.gov.uk/ieListDocuments.aspx?CId=133&MId=5886&Ver=4
Ends.