East Sussex County Council (ESCC) leaders have backed budget proposals, which would rely on the government allowing the authority to borrow as much as £70m in the coming year.
On Tuesday 27 January, the ESCC’s cabinet endorsed a proposed budget for the 2026/27 financial year to be debated at an upcoming full council meeting. It includes a 4.99% council tax increase and savings totalling more than £3m (or more than £6.3m when combined with those already agreed previously).
However, Councillor Nick Bennett, cabinet member for resources and climate change, warned councillors that these measures would not come close to covering the council’s additional costs for the coming year.
He said the council is expecting to face additional costs of more than £71.7m next year, as a result of inflation and additional demands in adult social care and children’s services.
Councillor Bennett said, “The increase in funding available is only £21m. That is from council tax. Business rates and government grants provide no additional funding to this authority in 2026/27. With savings of £6.4m planned for next year — plus bringing forward the 2025/26 deficit of £11.5m funded from reserves — the overall gap is £55.5m.”
Councillors heard how this shortfall could not be made up by drawing money from reserves.
In a statement backing this view, chief finance officer Ian Gutsell said the council’s reserves are currently at the “absolute minimum level required to safeguard … against unforeseen risks and volatility.”
The council plans to cover the shortfall by seeking Exceptional Financial Support (EFS). This is expected to come in the form of a £70m capitalisation direction, which has been requested from (but not yet confirmed by) the government.
Conservative council leader Keith Glazier said, “It is not through a lack of good planning. It just is that the reserves now, over many years, have been spent. The pressures continue to grow year on year and unfortunately the Fair Funding Review … has gone the other way and actually left us worse off.”
Later in the meeting, he added, “Let’s be absolutely clear in this room today; if the government don’t change the policy on what we have to provide or the money with which we provide it, not just this council but local government generally will not be able to continue the way it is. I don’t think that is a political statement; that is just a fact of life.”
Chris Collier, leader of the council’s Labour group, said he was “hopeful” support may be coming from central government in the near future.
He said, “With regards to the changes that the government will make to children’s services, I think we should be hopeful. We have already seen some huge impacts on the NHS, particularly around A&E.
“I know it is taking time, but it is a huge mountain to climb, so I am hopeful we will see very soon those impacts met.”
If the capitalisation direction is agreed by the government, the council will essentially be allowed to borrow money to cover its day-to-day spending.
It will need to pay this money back at some point. This could potentially come through the sale of assets or through additional spending to service the debt in future years.
A final decision on the 2026/27 budget is due to be made at a full council meeting on Tuesday 10 February.
Image Credits: ESCC .