East Sussex County Council could be left with a funding gap of up to £18 million if government reforms go ahead, a senior councillor has warned.
At a meeting on Tuesday, August 12 Cllr Nick Bennett, the council’s lead member for resources and climate change, approved the authority’s official response to the government’s “Fair Funding Review 2.0” (FFR2.0).
Council officers say their modelling shows the changes could mean a loss of between £12m and £18m by 2028/29.
Officers set out how the government proposals involve two “main aspects”: an overall simplification of what types of grants the government provides, and changes to the way the government works out how much funding each council receives.
East Sussex says it broadly supports simplifying grants, although it worries about losing some targeted funds. The bigger concern lies with how the new funding formulas would work.
One sticking point is an adjustment based on local wages. Average pay in East Sussex is lower than nationally, so the formula assumes services should be cheaper to run here. But, officers argue, this doesn’t reflect the true cost of providing care for children and adults — which takes up the majority of the council’s budget with costs that don’t fall just because local wages are lower.
An even bigger issue, officers say, is a planned deduction linked to council tax. Under the government’s proposals, funding would be cut back to reflect what each council is expected to raise locally.
In theory, this is meant to make the system fairer. In practice, East Sussex argues, it would “grossly” penalise the county. The formula assumes every band D household pays £2,000 a year in council tax everywhere — even though actual charges, and levels of payment, vary widely.
Because East Sussex has a relatively large council tax base, the county would lose out heavily under this system. The council says ministers should either rethink the deduction or give local authorities more control over how they set council tax.
The government has promised no council will see an immediate cash reduction. Instead, losses would be phased in over three years from 2026/27 to 2028/29 — around £6m a year in East Sussex’s case.
However, this transition period could overlap with wider changes to local government. Current proposals for reorganisation could see East Sussex’s councils replaced with a single unitary authority by then.
In its consultation response, the county council has urged ministers to rethink parts of the formula to ensure funding better reflects the real costs of delivering services locally.
Cllr Bennett said the council would continue to press its case, warning that the current plans risk leaving East Sussex short of the money it needs to provide essential services.
Image Credits: ESCC .