Arun District Council warned it could reach effective bankruptcy in five years if decisions and savings are not made.
The council’s head of finance, Tony Baden, updated members of the economy committee at a special meeting on Monday, January 8, that their medium term financial plan over the 2024/25 to 2028/29 budgets, showed £200,000 left in reserves if ‘no further action’ was taken by the council.
Mr Baden said the £200,000 was a ‘small but frankly unworkable’ amount of money for the council, but stated it was not an ‘imminent’ problem for the council as it was ‘unlikely’ to get to that point.
He said: “I don’t believe we’ll be in that position because we’re trying to come up with a plan now, but it does spell out the need to start making decisions soon, and I can’t overemphasise that enough.
“Should we not address the problem, it would inevitably end up with myself having to issue a section 114 notice and that’s certainly not a place the council wants to be – any financial decision making will essentially be taken away from members.”
He added that the national government settlement to the council was ‘disappointing’ but not surprising, saying the council could not just use borrowing to get out of the problem, and might need to make big capital investments to improve the council’s income in the long term.
The council saw a £250,000 increase from last year in funding from the national government for 2024/25, around £2.5 million in total, which was £21,000 less than council officers had predicted they would receive.
The economy committee also saw the 2024-2028 proposed financial strategy, which showed £2.1 million in savings from 10 to 20 per cent cuts across all of Arun’s services, with potentially another £500,000 subject to staff consultation.
According to the strategy report, this would see 18 positions at the council removed, five of which are currently staffed and two are group heads.
One of the council’s Joint Interim Chief Executive Officers, Phillipa Dart, said reducing the size of the senior management team would continue into 2024, along with reviews into services and assets to try and reduce the funding gap projected in the medium term financial plan.
Other areas the council considered finding savings in were environmental spending, external partnerships, community organisation grants, and the 2-hour-free-parking scheme in Bognor Regis and Littlehampton, but decided against it.
Previously, Mr Baden stated the council would run out of money in five years if councillors did not make ‘tough decisions’ to find savings by the 2027/28 budget – adding ‘good’ reserves, currently at around £25 million, had bought the council some time.
Council Leader Matt Stanley (LDem, Marine) also previously said investing in and building new homes would reduce the council’s reliance on rented temporary and emergency accommodation, and improve council tax income.