Brighton council begins work on £3m overspend

Brighton and Hove City Council has a £3m overspend for the next financial year

Planning has begun at Brighton and Hove City Council to try to tackle a £3m hole in its finances.

The Labour-run authority said in the past financial year pressure from inflation, increased demand for council services and a higher than expected pay award for council workers resulted in an end-of-year overspend.

On Thursday the council's Strategy, Finance and City Regeneration Committee heard that would need to be paid back over the next three years.

Labour won a majority on the council in May, after several years of there being no overall control.

Leader Bella Sankey told the meeting work on the next financial year's budget had already got under way.

She said: “We have agreed with officers that our budget setting process for 2024-25 should start right away and we will work creatively with residents, trade unions, officers and council workers to try to find ways to close the budget gap while maintaining vital frontline services and being ambitious for our city.”

Council leader Bella Sankey says work has already started on the budget for 2024

The meeting was told parking revenues had fallen by £1.2m, and an extra £700,000 was spent housing the homeless during the pandemic.

Meanwhile, the local government pay award, set nationally, cost more than £5 million more than budgeted for in February.

The council's finance officer Nigel Manvell said inflation was a key factor.

"I don’t think anyone would predict it would peak at 11.1% as it did in October," he told the meeting.

“That, too, was compounded by cost of living issues that began to rise and cause higher service demands in some areas of the council.”

The council had a working balance of £9m, he said, which would cover the overspend, although it would have to be repaid at a rate of £1.6m a year over three years.

Mr Manvell told councillors that reserves totalling £37m were earmarked for specific purposes while the working balance was there to cover unexpected spending.