The council now forecasts a £23.8m overspend for 2026/27 and has asked government for up to £30m more in emergency borrowing. Cabinet sees it on 15 October.
Brighton & Hove City Council expects to overspend this year’s budget by £23.8 million. The forecast rose by almost £3 million between July and August. Its latest budget report, published for Cabinet on 15 October, says the council’s reserves cannot cover the gap (Targeted Budget Management report, month 5).
The council has asked the government for more Exceptional Financial Support, “expected to be a sum of up to £30m”. The report stresses that this “is additional borrowing, not additional funding”. The government had already agreed £15 million of support for this year, as we set out on our council tax bands page.
What happens if the government says no
The report is blunt. If the request is not approved, the chief financial officer “would be forced to issue a S114 report”. That is the formal notice a council issues when it cannot balance its books. It means new spending stops, apart from essential and statutory services.
The report does not say when the government will decide. The same request for up to £30 million was already in the council’s July budget report (month 2 report).
How the forecast has grown
Officers report a fresh forecast to Cabinet through the year:
- Month 2 (May): £19.882 million
- Month 4 (July): £20.852 million (month 4 report)
- Month 5 (August): £23.835 million
The report says this year is unusual. In previous years the forecast started lower and fell as the year went on. This year it “started higher than previous years, but has continued to rise”.
On top of the £23.8 million, officers list another £18.862 million of risks that are not yet in the forecast because they are too uncertain.
What is driving it
The report points to four main pressures.
- Adult social care accounts for “the most significant financial pressures”. Demand for community care, nursing and residential places is above what was budgeted, and care packages are getting more complex and expensive.
- Special educational needs. More children have Education, Health and Care Plans, and more need specialist places, often outside the city. That pushes up home to school transport costs.
- Delayed savings. A council-wide reorganisation has not yet delivered £1.125 million of planned savings. The council has hired an outside partner to find them for future years.
- Parking income. It is 6% up on last year, but the budget assumed 8% growth. On-street income has grown; car park income has fallen.
The council also has £550,000 of one-off costs for reorganising schools.
The other accounts
Two separate budgets are also forecast to overspend:
| Account | Forecast |
|---|---|
| Housing Revenue Account (council housing) | £1.145m overspend |
| Dedicated Schools Grant, this year | £7.368m overspend |
| Dedicated Schools Grant, total deficit | £9.130m |
The report also warns about borrowing costs. Every 1% rise in interest rates would add about £780,000 a year to the council’s borrowing bill.
Changes to building projects
Cabinet is asked to approve changes to the capital programme. They include:
- an extra £1.4 million of borrowing for the Madeira Terraces regeneration
- an extra £524,000 for the asbestos programme
- £1 million less for Valley Gardens Phase 3
- £20.1 million of spending moved into later years
What it means for you
- Council tax is set for this year. The overspend does not change your current bill. Our council tax bands page has this year’s charges.
- Next year’s budget will be harder. The report says emergency borrowing only covers a single year. Unless savings and new money exceed the overspend, “the budget gap will not close”. Last year’s draft budget proposals came out in February.
- The meeting is public. Cabinet meets at Hove Town Hall on Thursday 15 October (agenda). The same meeting decides the Royal Pavilion Garden restoration and the Black Rock padel plan.
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