Financial challenges at Eastbourne Borough Council - FAQs

Why is the council forced to make savings?

The authority has repeatedly warned that the costs of homelessness and temporary accommodation placements are causing an unprecedented strain on council finances.

In Eastbourne, the council has been spending £4.5 million annually on temporary accommodation, which equates to 49p in every £1 collected in council tax.  This is unsustainable.

Despite cutting more than £3m from the 2024/2025 budget, additional savings of over £2.7m are needed.

Why is homelessness getting worse?

Homelessness is a complex issue, but in recent times the cost of living crisis, rising interest rates and inflation has left many people unable to afford increasing mortgage and rent payments.

What is the council doing to solve the homelessness crisis?

Eastbourne Borough Council has led a year-long national campaign lobbying the government about this social and financial crisis.

Council officers are also doing everything possible to reduce the number of people in temporary accommodation. 

The council remains unwavering in its moral and statutory commitment to provide accommodation for those in need and will continue to campaign and appeal to the new government for urgent help.

Has the council received any government support?

Two capitalisation directives were agreed with the previous government. 

A capitalisation directive allows a council to use capital receipts from selling assets and borrowing to meet revenue costs, but the loans must be repaid over 20 years at a higher interest rate. 

18 other councils were also left with no other option than to accept this type of financial arrangement.

What could the new government do immediately to help?

Councils receive a subsidy from the government every time someone is placed in temporary accommodation.

However, the subsidy was frozen at 2011 rates and remains fixed at that level. 

If the government uprated the subsidy to levels reflective of temporary accommodation costs in 2024, it would help councils manage in the future.

Sadly, even an immediate change to this subsidy would not remove the need for extensive savings now.

Where are savings being made?

Every council service is being reviewed and scrutinised for savings.

Cost saving measures so far include transferring the operation of Eastbourne Downs Golf Club to Get Golfing; transferring The Bohemian pub, formerly The Stage Door, to a new operator; selling a number of council assets; inviting expressions of interest in running parts of Devonshire Quarter; and reducing the council's events programme.

Cabinet meetings in September and November will consider savings and operational changes affecting the Towner, theatres, conferencing and catering, events, seafront and heritage services, the Sovereign Centre, public conveniences, rent subsidy and council grants and car parking charges.

These are all known as discretionary services, as opposed to statutory services. 

Councils are not required by law to provide discretionary services, but are required by law to provide statutory services, such as housing and refuse collection.

Are asylum seekers adding to Eastbourne Borough Council's costs?

No.

The Home Office meets all these costs.

Is it possible the council will enter bankruptcy?

Councils can't technically become bankrupt, but if they are not able to set a balanced budget, a Section 114 notice will be issued.

A S114 notice has a range of implications, including no new spending and strict limitations on existing expenditure.

Are other councils reporting budget cuts?

Yes. 

Sadly, there is a steady stream of councils in the news reporting concerns about setting a balanced budget and the need for extensive cuts to services.

Can you tell us more about the savings in Eastbourne?

There is a limit on what we can share at this time because no decisions have yet been made by the council's Cabinet.

On September 18, Cabinet will consider a significant reduction in grant funding for the Towner, an immediate closure of the heritage centre on Beachy Head, the transfer of operation of conferencing and catering at Devonshire Quarter, changes to the operation of the theatres, sales of assets and further efficiencies in events and seafront services. 

Following further assessments and consultation with employees and stakeholder groups, a second round of savings will be on the Cabinet agenda on November 13. These service areas include the Sovereign Centre, public conveniences, rent support and council grants and car parking charges.

In advance of the November meeting, council officers and partners at Wave Active are evaluating alternative operating models at the Sovereign Centre to reduce costs.

Work is also underway looking at how access to public conveniences can be provided across the town at a reduced cost by establishing a community toilet scheme. The impacts of removing rent support and council grants are also being assessed.

Could the council use Levelling Up funding from government to avoid making any reductions to services?

No.

Levelling Up grant funding can only be spent on projects for which it has been specifically awarded.

Do the savings impact Lewes District Council?

No.