Apologies for the lengthy gap since the previous report – the election campaign got in the way… normal service now resumes … but a Happy New Year to you all! This edition is a ‘Budget Special’ – I’m afraid it doesn’t make for very happy reading.
As we enter the New Year, the council has once again had to put together a budget for the coming financial year. That’s a task that gets harder each year – and more uncertain.
Over the last ten years, the money available to Hastings Council has reduced dramatically. We’ve lost over £55m in government grants cumulatively over that period, from a net budget of around £15m. We’ve been able to replace some of that by generating additional income, for example by purchasing commercial properties, which has raised over £1m to offset funding cuts. Nevertheless, many services we used to offer have gone completely.
This time last year, we were expecting a £1.75m deficit for the 2019/20 budget. Despite identifying over £300,000 in savings, the deficit has grown to over £2m, because of additional demands on the council. These include:
- increasing demand on our homelessness budget, with costs rising by £386,000 more than we’d expected (see later article on this);
- £100,000 loss of income from the East Hill Cliff Railway – this will be back in operation this spring, but has needed extensive, expensive repairs to get the 150-year-old structure back into working order;
- £82,000 lost income from house purchase land searches – you can do this online now, so fewer people request the information from the council and pay the ‘search fee’.
We’ll have to cover the £1.75m deficit for 2019/20 by using reserves. We had set aside reserves to deal with emerging deficits, but this year all these reserves will be used up.
Over the last year, a lot of work has been done to identify savings to reduce future years’ spending. In the end, we were able to identify almost £2m in savings and service cuts for the 2020/21 budget. That means a loss of around 30 posts – nearly ten percent of the total workforce. Those job losses will affect the council’s capacity to provide services, and some services will cease entirely.
We had thought that we’d ‘reached the bottom’ and that with those savings we would then, finally, have a balanced budget. Sadly, that proved not to be the case, because of the additional spending pressures that have emerged, along with further unexpected cuts in our grants from central government. These additional spending pressures include:
- continuing increasing demand on our homelessness budget;
- repairs to the ‘inland cliffs’ the council owns, which have become unstable because of increased rainfall;
- improvements to the Buckshole Reservoir dam (see later article).
It’s interesting (and alarming) to note that the second two of these are consequences of climate change. All of which means that we still have a deficit of around a million pounds, despite making £2m savings.
Next year’s budget, and the full list of savings we’re proposing to make, is now available for consultation on the council’s website (see link on the scrolling banner on the front page). Some of the larger cuts/savings we’re proposing include:
- Reducing senior management posts (£260,000);
- Ending ‘live’ monitoring of CCTV cameras by the council – the cameras will still be monitored by the police and will still be recording, we’re the only council in Sussex that has additional monitoring carried out by the council (£150,000);
- Reducing revenues and benefits staff, as more Housing Benefit claimants are transferred to Universal Credit, resulting in loss of government grant;
- Restructuring the development control team (£104,000).
The budget will also include an increase of 2% in the Hastings Council element of Council Tax (around 10p a week for a Band D property), the maximum allowed without a referendum. Council Tax will go up by a lot more than that though, because East Sussex County Council is allowed to put their CT up by 4%, and their precept (ie their share of the CT bill) is much bigger than the Hastings Council part.
There’s an additional £100,000 income included in the 2020/21 budget, from commercial priority purchases – that includes the full-year effect of properties bought during the current year, as well as potential new purchases. We’ll certainly be looking out for commercial property purchases that could give us a good net return, to bring in more income. There is also a growth item in the budget to create a new post to take forward sustainable energy generation projects – we’ll be developing schemes for ground mounted solar, solar panels over car parks, and roof mounted solar panels on properties where we own the freehold. We haven’t allowed any of that income in the budget as it’s difficult to quantify. We’ll also be looking at the ‘commercialisation’ of council services, in particular our new in-house waste team, by (for example) offering trade waste collections to local businesses.
Competitive Grant Funding
Hastings Council has been very successful at bidding into EU and other schemes for one-off funds for particular projects. The EU schemes will disappear soon of course, but we’ll continue to bid for money offered for specific purposes by Heritage Lottery, Arts Council, Homes England, government departments, and others. This funding is useful for improvement projects that the council couldn’t possibly afford from its mainstream budget. During 2018, Hastings Council received around £10m in funding through these competitive schemes, with projects including ranging from the refurbishment of the derelict fountain above White Rock Baths to a series of employment and training initiatives from the CHART programme in the most deprived wards. But this funding is only available for these ‘extra’ projects – it can’t be used to supplement the council’s day-to-day spending.
While the council is severely limited in its day-to-day revenue budget spending, it does not have the same constraints in its capital budgets. For revenue spending, the council can’t borrow to balance the books, and can’t end the year in deficit. But there are (at the moment) no limits on how much the council can borrow for capital schemes – in other words, for construction projects and for acquiring land, property, or other assets, as long as it sticks to ‘Prudential rules’. These rules mean the council must have the means to pay off the loans it takes out to fund capital schemes. It can fund this either from its general revenue budget (not usually an option when we’re making such big cuts) or from income that will be generated by the capital scheme itself.
So the council is developing a programme of ‘self-funded’ or grant-funded capital schemes to regenerate the town and produce more affordable housing and employment opportunities. These include:
- The White Rock and Bohemia Quarter project, to refurbish White Rock Gardens and create a new leisure centre and entertainment venue;
- The development of the ‘Lower Tier’ site on Bexhill Road to create 190 new sustainable homes;
- Construction of a new business start-up centre and business skills training project in Hollington to create over 70 jobs;
- Redeveloping the Harold Place site as a restaurant (see later items on some of these projects).
At the moment, it’s not clear how we’ll cover the £1m gap in the budget that still remains. And the future is not looking good. The government is intending to carry out a ‘fair funding review’ of local government, but we anticipate that this will divert money to county councils to boost spending on adult social care, rather than provide any more money for district councils such as Hastings. We also understand that there will be no additional money provided for local government, despite years of cuts – for councils, austerity is far from over. We’re not the only district council in this predicament – others have even bigger problems. Those in deprived areas such as Hastings, where demands on their services are greatest, have been particularly hard-hit. If councils aren’t properly funded in the future, they will simply no longer be able to function.
This reservoir is in Alexandra Park, and while it serves no purpose as a reservoir for water supply anymore, it is used by anglers, is part of the local ecosystem and attracts migratory birds, and does hold a large amount of water.
The Environment Agency recently introduced new safety standards for reservoirs following the near-collapse of the Todmorden Reservoir in Yorkshire last year. Like Todmorden, Buckshole is an old, Victorian reservoir not built to modern standards. If it were to collapse, over 600 properties could be subject to flooding. Works have been identified as necessary to the valve system used to reduce the water level, and to improve the ‘spillway’, where water is drained out of the reservoir. At the moment, the valve to reduce water levels is (for unknown reasons!) housed in the tower structure in the middle of the reservoir, so council staff have to row out to it to adjust it. The new valve would be housed in the dam. These works will cost around £1m.
The only option to meet safety requirements, apart from these works, would be to reduce the level in the reservoir to around one metre deep, or decommission the reservoir entirely and remove the dam. Reducing the level would still have safety implications and require other works to stop people climbing down the steep sides of the reservoir, and would look pretty horrible. Decommissioning the dam would be even more expensive, and would lose the reservoir for anglers and as a place for birds and other wildlife to feed.
There are many councils who own reservoirs, and who are affected by these (very expensive) safety improvement requirements, so we shall be getting together with these other councils to lobby the government to provide grant funding for these works (some have said they simply can’t afford it). It seems unreasonable to expect councils who happen to own reservoirs to pay for these works when so much money has been cut from council funding. These improvements, while necessary, have been demanded by the government, so it should be paying for them.
Bohemia Leisure and Entertainment Centre
A couple of years ago, a consultation exercise was carried out with local groups and residents to produce a ‘masterplan’ for the redevelopment of White Rock Gardens and the council-owned land beyond that on the other side of Bohemia Road (up to but not including Summerfields Woods). The idea was to create new leisure and cultural facilities, as well as refurbished gardens, funded by using some of the land for new housing.
Following this masterplan being developed, a further, more formal, consultation process has been taking place to produce an ‘Area Action Plan’ for the area, which will constitute a formal planning policy document on which the redevelopment of the area can be based.
One of the key reasons for this proposal was the need for a new leisure centre to replace Summerfields. The building is pretty shabby, and will need replacing – if it’s not replaced, it will have to eventually close and the town would be left without a leisure centre. We also need a new facility to replace White Rock Theatre. White Rock Theatre was never designed as a theatre (it was built as the home of the Hastings Municipal Orchestra in the 1920s), it lacks a fly tower, wings or decent backstage facilities. And it’s a bit too small to attract the better-known bands and other musical performers on the touring circuit.
So the council agreed to commission a study on whether it would be viable to produce a combined leisure centre and entertainment venue, to provide a swimming pool, fitness and sports facilities, as well as a music venue and potentially a small arts centre/theatre. The result of this study showed that it is possible and could be achieved within the overall self-funding model for the Bohemia Quarter redevelopment. Sport England and the Arts Council are also both keen on this model, and have provided around £30,000 towards the £100,000 cost of the next stage of development, which would be to carry out detailed site investigations of White Rock Gardens to establish the best location for the centre, and get a clearer idea about land constraints and eventual costs.
A report to the council’s cabinet meeting approved this approach earlier this month, you can see it here.
There’s also a council web page with FAQs on the Bohemia Quarter development, which you can see here.
Lower Tier Site
This site, behind Bexhill Road and off Freshfields Road that leads to the tip, was originally proposed for development as part of the ‘Sports Village’ idea put forward by Horntye Sports Centre Trust and Hastings United FC. That didn’t come to anything in the end, but Homes England (a government agency) was still keen to offer a £7m grant towards redeveloping the housing site.
Previously, this site hadn’t been proposed for housing because it floods (indeed, it was flooded over Christmas). Nearby homes on Bexhill Road have flooded in the past, too. Homes England provides grants to develop sites that couldn’t be developed commercially, in this case offering the money for flood mitigation measures.
Further investigations have now taken place into flood mitigation, and the main problem identified with the site appears to be a non-functional pump and faulty ‘non-return valve’ maintained by the Environment Agency. This drains water from the drains that run around the site into the Combe Haven river. Indeed, it seems that this valve may never have worked – local residents have observed that the site didn’t flood at all until the 1960s, when the Environment Agency (or its predecessor) changed the layout of the drains and the Combe Haven river, and the way it runs out to the sea.
These proposals to prevent flooding will now be put to the Environment Agency, who will need to approve them before any development can take place.
If development can then proceed, the proposal is to create 190 new homes, 60% of them available for social rent – homes we desperately need to tackle the local homelessness crisis and a severe shortage of affordable housing. Most of them will be made with ‘modern methods of construction’ and will be zero carbon, or very close to zero carbon, making the entire development zero carbon by using sustainable energy generation as well as high standards of building insulation. There would be EV charging facilities at homes, with rapid chargers also available communally. While details have yet to be established, the idea would be to make this development as ‘green’ as possible, enhancing biodiversity, promoting walking and cycling, and with the lowest possible carbon footprint. There would also be money available to make other improvements in the area – for example, by enhancing and improving the drainage of the sports pitches to the north of the site, and creating new changing facilities.
Temporary Homelessness Accommodation
As reported above, on the budget, the borough (and indeed the whole country) is experiencing a homelessness crisis. The numbers accepted as needing emergency housing (under requirements placed on councils by the Homelessness Act) are high, but are not increasing significantly. The big problem is that households are spending much longer in temporary accommodation, because there is no housing available that they can afford to move into, so they’re spending much longer in temporary accommodation – more than a year in some cases. The main reason this happens is that most families who lose their homes are dependent on housing benefit to pay their rent. However, the Local Housing Allowance (the amount the government sets for housing benefit or the housing element of Universal Credit) is way below what actual rents are (around 40% lower in Hastings). So they can’t afford the rents on private rented properties, and because so few new social rented homes are being built, there’s little or no chance of most of them being offered a social rented property.
Traditionally, councils have provided emergency housing by placing people in bed & breakfast accommodation. This was fine when it was just for a few days, but completely inappropriate for stays of a year or more, especially if that accommodation isn’t in the local area (as it sometimes isn’t). So Hastings Council has been doing two things to reduce the need for using bed & breakfast accommodation. The first of these is the council’s ‘Social Lettings Agency’. This is an arrangement whereby private landlords lease their homes to the council for a fixed term (usually three years) and the council then uses these homes as temporary accommodation for homeless households. There are around 60 properties in this scheme. The second scheme is where the council actually buys properties in the private sector and uses these to house homeless families. So far, Hastings Council has borrowed over £5m to purchase properties for this purpose, and will be buying more. Both these schemes cost significantly less overall than using bed & breakfast accommodation, but while they’ve saved money, the overall costs have continued to increase, so all they’ve done is limit the increase in costs.
Hastings Council is now spending, overall, over £2m a year (about 13% of our total net budget) on keeping homeless households in temporary accommodation. This is unsustainable and ridiculous. In the short term, the government could make the problem far less severe by simply increasing the Local Housing Allowance to a realistic level. That would actually save public money, as the additional housing benefit would cost nowhere near as much as keeping households in temporary accommodation. But most of all, we need more housing provided at genuinely affordable rents. Until the government realises this, and provides the funding to build significant numbers of social rented homes, the crisis will continue.
This was a new grant funding programme announced just before the general election, to help the 100 most deprived towns (including Hastings). It’s not really ‘new money’ – rather, it’s been reallocated from pre-existing schemes.
The offer is for ‘up to’ £25m in funding for capital projects to help regenerate the local economy, focusing on transport, skills, and physical regeneration. Hastings Council has been awarded £173,000 to put together an evidenced-based ‘proposal’ for how this money should be spent.
To achieve this, the council has to assemble a project board made up of representatives from other public sector partners, schools and colleges, the business sector, and the community sector. Ideally, we’d like to have advertised for people to participate on the board, but as we have to get the board assembled by mid-January, there isn’t time to do that, and we’ll have to use representatives known to the council who have previously been involved in similar projects.
The job of this board then is to put together a proposal, using the £173,000 to commission studies to provide the ‘evidence’ to justify proposed projects. There will also be a public consultation process to look for projects and consult on them, which the board will also have to devise. The overall proposal must be finalised by early autumn, following which it’s negotiated with the government and, if they decide they like it, funding is made available in about a year’s time. You can see a report on this from the January cabinet agenda, here.
While this £25m potential funding is welcome, it is however nowhere near what’s needed to address the issues it’s supposed to. As Rob Lee (leader of the opposition Conservative group on the council) said at the last council meeting, it needs to be ten times this much. Or indeed more – the last Labour government spent over £300m on regeneration schemes in Hastings (including the Station Plaza health centre and the new college building), as well as many millions in ‘Area Based Grants’ to fund community development and training projects. But it’s a start, and it will help.
In December, the council’s cabinet meeting approved a recommendation to redevelop the Harold Place site (where the toilets used to be) as a café/restaurant. The council has been approached by a restaurant chain to provide them with a building on that site, which the council would build to their specification and lease to them. This would generate an overall net income for the council, after allowing for the borrowing costs to fund the development.
There was also an option to simply sell the site, but this would have meant the council losing control over the design of the building. As this is such a key site in the town centre, we want something of good design quality that will enhance the town centre, even if that costs a bit more to build – we’re undertaking this as a self-funding regeneration project, rather than primarily for income generation.
The restaurant chain involved (the name will be announced when the deal with them is signed off) is open all day, and during the evenings, so will help to boost the evening economy in the town centre too.
The council did also consider simply paving the area over to create an open space, but the costs of doing that were over £100,000 because the weak floor to the old toilet block would have to be removed and replaced. As there would be no additional income to cover that, it wasn’t affordable.
So this project will create a new, iconic restaurant building, right in Hastings Town Centre, and will create a new income stream for the council. Details of the building design will be released and consulted on through the usual planning processes, but the design process will begin soon.
That’ll do for now – if you’d like more information on any of this, leave a message on 01424 451066, or e-mail at [email protected]