Council Leader calls on government to fund local services
The Leader of Eastbourne Borough Council has acknowledged a government report that identifies soaring homelessness costs as the root cause of the financial pressures being managed by the authority. The costs have skyrocketed in recent years, with the council spending up to £5 million a year on temporary accommodation.
The report by CIPFA was published alongside a review undertaken by an independent panel that cited 'factors outside the council's control', most notably homelessness, as representing a 'fundamental challenge, in both operational and financial terms'.
Councillor Stephen Holt, Leader of Eastbourne Borough Council, said:
"We welcome the review's findings and recommendations. These insights are invaluable as we continue to rebuild our financial resilience and for long-term planning. Crucially, the review provides an independent validation of the scale of the financial challenges we face and the decisive actions we are taking to address them.
"Up and down the country, councils are being forced to make difficult decisions due to the broken state of public finances, which is widely acknowledged by partners including the Local Government Association. "
Following dialogue with the government, support was agreed in the form of capitalisation directions of £3 million for 2023/24 and a further £3 million for 2024/25. The council was also granted £2 million in exceptional financial support for 2025/26, with a potential further £1 million in 2026/27, if required.
Councillor Holt said:
"It is important to make clear that this finance is not 'additional money' in the traditional sense; it is a permission to borrow or use capital receipts to fund day-to-day revenue costs, effectively acting as a loan that we must repay. While this support is critical in helping us manage immediate pressures and set balanced budgets, we have long stated that it is unsustainable and it underscores the need for a truly sustainable funding model for local government nationwide.
"I call on government to once again put their words into action. Support local councils in delivering services by funding them properly"
The government has sanctioned over £5 billion in exceptional financial support to 42 councils in recent years, and only last week East Sussex County Council confirmed it is assessing this option in order to address a £37.5 million deficit in its 2026/27 budget.
A number of councils in the worst financial situations are now being run by commissioners appointed by the Secretary of State and in these cases many discretionary services, such as sports, leisure and cultural facilities, are at immediate risk of closure. Examples of borough councils in this position include Woking Borough Council, Thurrock Council and Spelthorne Borough Council.
Councillor Holt added:
"If anyone still doubts the gravity of the financial crisis that continues to grip local authorities, the Local Government Association has predicted an £8 billion council funding gap by 2028. That is staggering."
The Minister of State for Local Government, Jim McMahon MP, recently wrote to Councillor Holt explaining that he understood the 'fragility in the system has left some councils in difficult positions' and said the government would 'work to support local services and put the system back on a sustainable footing'.
Councillor Holt said:
"The system of funding isn't fragile, it is broken. And politicians of every colour will confirm that.
"However, the Minister clearly recognises the scale of the problem and the need for fundamental change, and we have to remain hopeful the government will deliver on that. "That said, the government's plan for devolution and local government reorganisation will not come close to solving the existential problems we are facing, without billions of pounds of new money for public services."
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