Council lacks reserves to cover projected deficit

A report to East Sussex County Council said it could have a funding gap of £56m next year

East Sussex County Council expects to have insufficient reserves to cover a projected near-£56m deficit at its next budget, a senior councillor has said.

Conservative councillor and vice chair of the cabinet, Nick Bennett, told a meeting earlier the council faced a "stark" financial position.

The local authority has begun applying to the government's Exceptional Financial Support (EFS) scheme for councils, according to the Local Democracy Reporting Service.

Councillors also heard that the authority would look for new savings for 2026-27.

The EFS scheme allows local authorities in the most difficult positions to apply for extra financial help.

Bennett said: "The reasons for the shortfall have been clearly laid out in the context of increased demand for, and the cost of delivering, our services, particularly across social care.

"I don't think this is news to anybody, but the level of difficulty is profound."

Leader of the council's Liberal Democrat group, David Tutt described the financial position as "a very depressing set of circumstances".

'Politically unattractive'

A Chartered Institute of Public Finance and Accountancy review, which the council commissioned in June, found the authority demonstrated "sustained financial discipline" and willingness to take "politically unattractive decisions".

But the review, necessary for an exceptional financial support bid, also highlighted a risk unallocated reserves would be exhausted.

Government support would likely not involve additional grant funding. Previously, other councils have been allowed to take loans or sell assets to cover deficits.

Council leader Keith Glazier said he was "interested to see what the final version of the government's criteria" would be as it was "all under review currently, so we don't even know what may or may not be on offer".

Labour group leader Chris Collier said there was "a broader conversation for the group leaders going forward" about possibilities for exceptional financial support.

East Sussex County Council will be amalgamated with other Sussex councils into a new system of unitary authorities from 2028.