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22 November 2017

Budget proposals for 2018/19

For the latest information about the budget read our Proposals published for Budget Council 2018/19 news release, dated Wednesday 14 February.

Our budget proposals for 2018/19 continue to focus on the needs of people living in the city.

  • Services for residents are prioritised, for example with an extra £6,022,000 allocated for adult social care.
  • The New Homes for Neighbourhoods programme, building much needed new council homes on council owned land, will continue to be supported. There's £48 million currently allocated for schemes on site and in the pipeline.
  • Investment of capital is also included in the proposals, to look after the city’s assets which support the local economy by attracting visitors and also make Brighton & Hove a better place for residents to live.

The budget proposals continue to protect the most vulnerable, get basic services right and make sure residents benefit from growing the local economy

These proposals also maintain services and balance the budget in a challenging climate for local authorities across the country. Some parts of the budget are legally ring-fenced for specific use, for example, we can’t spend the schools grant on road repairs.

Local authorities are said to be stretched ‘close to breaking point’ after years of reducing government grants combined with rising demand and costs.

Brighton & Hove City Council budget 2018/19

The budget proposals for 2018/19 reflect the council’s ongoing commitment to protect frontline services and support voluntary sector partners. The proposals are designed to balance the budget and invest in essential services, despite growing demands and less money.

The proposed budget for 2018/19 was published on 22 November 2017, and will be reviewed in the months ahead until all 54 councillors gather at Budget Council. Budget Council will be held on 22 February 2018, when the budget for the year ahead is due to be set.

The council provides more than 700 services residents of the city see or use every day, paid for by the annual council budget. The total budget for providing council services to the city’s population of 289,200 people is currently more than £756 million.

The proposals include:

  • Support and additional resources for frontline services such as learning disabilities and child protection services.
  • An extra £3,116,000 for children’s social care services to support increasing demands and costs of caring for looked after children.
  • An extra £6,022,000 allocation for adult social care services and additional support for rough sleepers.
  • Support for the community and voluntary sector services through protection of our Third Sector Investment Programme, including continuing support for the Community Banking Partnership.
  • Additional support for the local East Sussex Credit Union to provide accessible banking services and money advice (part of a range of support being provided by the council as Universal Credit is rolled-out).
  • Innovating the way we run refuse, recycling and street cleaning services, for example technology such as big belly bins which help to reduce collection costs.
  • For the third year running, no libraries are proposed to be closed.
  • Investing more than £10 million, including capital funds gained by reducing our use of council buildings, to support projects helping our commercial and visitor economies. Proposed allocations include Shelter Hall (minimum £1 million), Brighton Town Hall (minimum £1.5 million) and the Madeira Terraces (minimum £1 million).

Reducing government grants

It has been widely reported how demands for local authority services are increasing at the same time as the cost of social care for people with complex needs is rising. This puts huge pressure on local services working to help those in need

Combined with reducing government grants year on year, these factors are having an accumulative effect on local authorities across the country.

The Revenue Support Grant from government will reduce to £6,523,000 by 2019/2020. The grant was £33,126,000 in our 2016/17 budget. This grant drops significantly each year. The reduction for 2018/19 is £7,474,000.

Balancing the budget

To legally balance the budget for the year ahead, changes need to be made. An estimated cost reduction of £13,362,000 is required in the budget for 2018/19. Looking forward, an overall budget gap of £23,311,000 is predicted between the 2018/19 and 2019/20 budget.

In Brighton & Hove we’ve been preparing for the rising pressures and we’re changing how we run the council to reduce costs. We’ve reduced council costs by around £64 million in the last three years; the figure is £97 million over the last five years.

But now, given the high level of cost reductions that have been made in recent years, identifying further ways to save money is increasingly difficult without impacting on essential services many vulnerable residents rely on. A vital part of the budget setting process also involves continuing to support the city’s important community and voluntary sector.

At the same time, the council must find money to provide good quality public services such as refuse collection and recycling.  

Where our budget funds come from and restrictions on ring-fenced funds

The majority of the budget comes from Government grants. The cost of all services in the current 2017/18 budget is £756 million, of which Council Tax funds only 17%. This means that Council Tax provides less than £1 in every £5 of what we spend on running your services in our city.

The proposals are based on a presumed Council Tax rise of 4.99% made up of a 1.99% annual rise and the Government’s 3% Adult Social Care precept.

Spending on schools, housing benefit and council housing is ring fenced by law. More than 40% of the budget comes from government grants ring fenced for schools and housing benefit. About 7% comes from housing rents and is ring fenced for council housing

In July this year we estimated the council budget gap for the 2017/18 financial year as totalling £11.6 million. The increasing level of social care pressures and a further reduction in the Government’s education services grants has seen this rise to £13.3 million.

The proposed budget currently assumes a standard increase in fees and charges. This is a complex area, for example penalty charge notices (parking fines) where the levels of fines are set by government and cannot be changed independently. The fees and charges for 2018/19 will be detailed in the final proposals going to February’s Budget Council.  

As mentioned, during the last three years we’ve saved around £64 million mainly by doing things differently and working more efficiently to minimise the impact on services.

We now need to plan to save a further £23 million over the next two years. The government’s long term plans for funding of local government are not yet known.

These changes and the push from central government towards increased self sustainability mean many local authorities, including Brighton & Hove, will always look at best options for the commissioning and delivery of services and make difficult decisions about priorities.

Our income and the cost of our services for 2017/18

Four year budget strategy

The council has developed its budget savings proposals with a longer term view of the direction of services in mind. Four year integrated service and financial plans were developed in 2016/17 and are refreshed each year. Our medium term financial strategy

What happens next?

The Draft Revenue Budget and Capital Investment Proposals 2018/19 are coming to Policy, Resources and Growth committee on Thursday 30 November 2017.

The committee papers are item 64 and available to download from our website.

Budget Council is Thursday 22 February 2018.

Find more information about our budget, including a timeline for the budget setting process, at www.brighton-hove.gov.uk/bhbudget