Hastings councillors discuss Local Government Association report into financial challenges

On Monday (August 7), Hastings Borough Council’s cabinet discussed a long-awaited report, following on from a Local Government Association (LGA) peer review of the authority’s finances in March.

The final report paints a difficult picture, warning that the council could, if serious steps are not taken, be forced to issue a section 114 notice within the year. Such a notice is often compared to bankruptcy proceedings.

The report reads: “The issuing of a s114 notice is an extremely serious matter; it will severely impact the council, both in terms of its ability to deliver for residents as well as its wider reputation.“All necessary steps should be taken now to reduce expenditure and make savings promptly. The peer challenge team are of the view that the council has the means to address the budget and savings problems if it works together to swiftly implement the cost reduction programme, and promptly realises planned savings.”

The report goes on to make 13 recommendations for how the council can improve its financial position. These recommendations, all of which have been accepted by the council, include: undertaking a comprehensive spending review; providing more detailed financial planning and reporting; and taking action to reduce its spending on homelessness.

Speaking at the meeting, Labour council leader Paul Barnett said: “Inviting in the LGA was part of a strategy to ensure that the actions the council was already taking, in response to the growing and quite frankly alarming rise in homelessness in the town, were credible and sufficient.

He added: “I think the important thing to note this evening, as we sit here in August, is that there was a presentation at the end of their three days here … and at that presentation they outlined clearly what their recommendations were going to be.

“The final report, although it has some changes in detail, doesn’t contain any surprises that we weren’t told in March. One of the promises I gave at that presentation was our response to their recommendations and challenges would start the next day, in fact it started that evening.

“So I am not surprised that … what is contained in our response report this evening is nearly 100 actions that have been taken or are planned to be taken. Many of them were taken immediately following the LGA’s departure at the end of March.”

In discussing the report, cabinet members highlighted what they considered to be the biggest challenge facing the council’s finances — the amount of money it is spending on temporary accommodation.

The amount the council spends on temporary accommodation has risen sharply over the past few years as more and more people seek help.

In 2019, the council spent around £730,000 on temporary accommodation. In the last financial year (2022/23), this figure had reached £4.5m.

By the end of this year, the figure is expected to reach £5.6m, around a third of the council’s entire £16.5m net budget.

In human terms, this figure represents 522 individual households (collectively more than 1,000 people) who are currently being housed in temporary accommodation by the council.

If this spending on temporary accommodation was taken out of the budget, cabinet papers said, the council would be running a surplus of around £1m.

Discussing the report, Labour cabinet members took aim at the government, saying it had failed to properly tackle a countrywide housing crisis.

Among those to comment was John Cannan, chairman of the council’s charity committee. He said: “I work at the Seaview Project [a local homelessness charity] and I see all the tremendous things they and all the other voluntary organisations [do].

“I think it is a shame that others don’t take the time to understand that a bit better and I think it is a crying shame that our local MP does not take the time, on her intermittent visits to Seaview, to engage with clients and hear their stories.”

He added: “This government as a whole refuses to recognise the problems, never mind help solve them. However, I am actually confident that this council and Hastings as a whole — including the third sector — will come together to solve them.”

These sorts of comments appeared to strike the wrong note with the council’s opposition parties, however.

In a statement issued on Tuesday (August 8), a Green Party spokesman said: “Last night’s cabinet discussion on the results of the finance peer review spent more time blaming the government for decimating local government finance and a broken housing market than facing reality and coming up with local creative solutions to the budget crisis we face.

“This lack of strategic thinking is highlighted again and again in the report and not addressed in the cabinet report written in response.

“We are reaping the results of years of bad decisions by this Labour administration that were not subject to proper scrutiny and are now having to deal with the fallout.”

They added: “Less laying the blame elsewhere and more urgency and pace is needed to tackle this crisis if we are to avoid going bankrupt as a council. There was mention at the cabinet meeting of the great skills and knowledge available in this town, let’s make sure we finally start to use it.”

Mrs Hart and the council’s Conservative group were also approached for comment, but did not respond by time of publication.

Further discussion of the LGA report is due to take place at a meeting of the council’s overview and scrutiny committee on Wednesday (August 9).