Hastings council bankruptcy fears amid housing crisis

Hastings council has warned it may have to issue a Section 114 notice

An increase in people in temporary accommodation is pushing Hastings council to the brink of bankruptcy.

Officers warned if costs continue to grow and savings are not made, it would have to issue a Section 114 notice, effectively declaring itself bankrupt.

The BBC has seen sections of a Local Government Association (LGA) report which raised concerns that councillors are not facing reality.

The council said the local housing crisis would require tough decisions.

Elsewhere in Sussex, Crawley Borough Council raised fears of bankruptcy earlier this year.

And last month Woking Borough Council in Surrey imposed emergency spending restrictions because of its £2bn debt.

'Tough messages'

Hastings council cabinet papers, dated 3 July, said: "If the position is not immediately addressed... the chief finance officer will have no option other than to issue a Section 114 notice."

A further report from the chief financial officer described the position as "incredibly precarious".

Budget papers had previously revealed: "Whilst the council's budget is impacted by the extremely high costs of temporary accommodation, our income is not enough to cover our expenditure. The work to reduce the costs of temporary accommodation is our biggest priority... however the full effects of our efforts will not be realised for two to three years."

And another report in February revealed the main issue in Hastings was the lack of affordable accommodation in both the private and social housing sectors.

It said homelessness had increased but not dramatically and the main problem was lack of options to move on.

However, the leaked LGA report stated: "Compassion from the political leadership is not balanced to the reality of the financial position."

It said political decision-making needed to focus on reducing costs.

A council spokeswoman said the LGA review was not yet published, but it would be published alongside a council response.

"We know that this review needs to focus on our local housing crisis, as the financial impact of more than 1,000 residents needing temporary accommodation is the main risk to the council being able to balance its budget," she said.

"Tough messages on this are important, as the scale of the housing crisis means tough decisions for the whole council."

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