East Sussex County Council facing £23million black hole

The calls came at a virtual meeting of the council’s cabinet on Tuesday (June 2), where councillors shared an update on the council’s activities since the beginning of the covid-19 outbreak.

During the meeting councillors heard from the council’s chief finance officer Ian Gutsell that the council had been hit with additional budget pressures of around £49m, as a result of additional spending, missed savings and reduced income.

Based on current modelling, Mr Gutsell said, the council faces a £23m funding shortfall and would begin to eat into its reserves by the beginning of August – even with the £26.1m of emergency covid-19 funding received from central government so far. 

Mr Gutsell said: “The funding, based on our current spending profile, will take us to the end of July [or the] beginning of August and unless we receive further funding from government, or other mechanisms, then we will start to dip into reserves from that point to fund the pressures. 

“The current position as presented is really around one-offs. We need to be mindful of that in terms of the 2020/21 impact. 

“The real significant issue for us looking forward is how we set [next year’s] budget, particularly with the uncertainty around the spending review, business rates and fairer funding all being slipped and the implications of services going forward in the post-covid world.”

However, Mr Gutsell stressed the council’s spending models would be likely to fluctuate as circumstances change and more information comes forward.

For example, Mr Gutsell said, the council had revised down its total predicted spending on PPE, saying it now expects to spend closer to £9m rather than the £16.6m originally modelled. This is based on a monthly spend of around £725,000 on purchasing PPE, he said.

On the other hand, he added, the return of pupils to schools leading to increased spending on school transport. Other areas of new spending were also likely to arise, he said. 

Cllr David Tutt, leader of the council’s Liberal Democrat group, said: “Clearly we have spent, as a county council, vast amounts of money. 

“The government has already given us some money, which is welcome, but we will need to continue to lobby on a cross-party basis to get back everything we have spent and indeed fill the gaps in income that were part of our budget, when it was set back in February.

“Looking at PPE, I fear the government perhaps hasn’t done as well as it perhaps could have done, but I would like to pay tribute to people within the county and the council who have ensured places haven’t run out. 

“When you look at how much has been spent, if that figure ends up being correct, £16.6m, it gives a very clear indication of the effort that has gone into this and the need that has been in place.”

Meanwhile  Labour group co-leader Godfrey Daniel, said: “I’m actually worried about local government itself really. 

“We’ve been savaged for the last 10 years and perhaps the Conservative government will at last realise that you need good local government. Where would we be in this county without an effective East Sussex County Council and its staff?

“Are we going to get the £23m shortfall? We don’t know and it is what we don’t know that worries most of us I think, because we need to have appropriate local government finance and appropriate public health finance.

“I live in hope that the government will actually respond fully, but I live in hope rather than expectation I’m afraid.”

Both councillors also praised the cross-party working on the council’s response to the pandemic.

In response to similar comments, later in the meeting Conservative council leader Keith Glazier said: “When we continue, we will set a budget that allows us to provide the best services possible with the resources available at the time.

“What I think is really important is what Cllr Tutt said in his introduction, which is that cross-party, we need to continue to lobby government to fulfill their commitment. [It] said ‘local government, you go and sort this coronavirus and we will pay you whatever it takes.’ 

“But also [to say] not to forget that this is not just about the here and now. Some of these costs will be ongoing. If we can continue to make those points to our political leaders, I hope they will then listen.”

During the meeting, councillors also heard about the council’s other challenges since the beginning of the crisis. 

These included increased pressures on adult social care, working to enforce government guidance through its trading standards teams and providing support to businesses affected by the lockdown.

The council has also been working with partners to support other efforts to respond to the crisis, councillors heard.

Cllr Glazier said: “I just want to reiterate what i’ve said before; how impressed I am with the whole response from the community and how proud I am of the way our staff and services have contributed to that. 

“The pandemic has meant a huge change to the ways we work and the services we deliver, very rapidly we have responded to that well and in most difficult circumstances. 

“I think the whole of society needed to respond to the challenge and in East Sussex our strong partnership with the boroughs and districts, health, the community sector and businesses has helped us to be able to do that.

“As we move forward with the lessening of the lockdown and begin to think about restoring our services, we need to think about the positive lessons we have learned and will take forward into the future.”

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