The soaring cost of housing the homeless is helping to force a Sussex council to spend almost £2 million of its reserves this year, councillors have heard.
Hastings Borough Council is predicting an almost £1.9million shortfall in its 2024/25 budget, a meeting of its cabinet was told yesterday. .
The council expects to face a deficit of £1,882,673 at the end of the current financial year — a 136 per cent increase on the budgeted deficit of £796,300.
To fund this forecast overspend, officers said an additional £1,086,375 would need to be transferred from the council’s general reserves, bringing the total in-year contribution from these reserves to £1,882,673.
The report said the majority of the increased costs was as result of unbudgeted spending in its housing department, specifically on temporary accommodation, which is expected to come to about £1,052,234. This unbudgeted spending is expected to bring the council’s total expenditure on housing to around £7,615,682 by the end of 2024/25.
These figures saw concerns raised by councillor Helen Kay (Labour, Wishing Tree), who said: “We are only in December, we’ve got a further four months of the financial year to go, and we are already planning to transfer an additional £1.8million from our reserves. As you know, the general reserves forecast is £5.33million.
“What reassurance can the council leader… give us that mitigations are in place so that we are not at risk of breaching the £4million limit of our reserves, given where we are and some of the risks, particularly in relation to temporary accommodation?
“We are mindful of the fact that 67 households approached the council as homeless and were moved into temporary accommodation. We are aware that the figures for November are slightly better — they are not as alarming as those for October — but there may well be a continued rise in temporary accommodation for December through to March.”
In response to Cllr Kay, Green Party cabinet member for finance Darren Mackenzie said the increased costs were the result of a wider ‘housing crisis’, but the council did expect to maintain an above-minimum level of reserves.
Cllr Mackenzie said: “Yes, the minimum level is £4million worth of reserves that we have to have and at present our expectation is that we will have nearly £5.3million of reserves at the end of the financial year, so we are not at risk of breaching that threshold at the moment.
“But it is not just what we do right now at the end of this financial year, it is also what we do moving forward, which is why the budget is not just looking at next year but the three years thereafter as well, to ensure that have a plan of action and a strategy to make it sustainable, so that we are not at risk of breaching it.”
Cllr Mackenzie added: “You are right that we are seeing unprecedented levels [of demand for temporary accommodation], but it is that volatility, it is the unpredictability, which is impossible to anticipate. What should be noted is that the full year effect we are seeing of the housing crisis at the moment is that full year of £1million.
“I don’t have any expectation that all of a sudden we are going to see such increasing levels in December and January that it is essentially going to double that housing adverse variance to nearly £1.6million. It is not going to happen.”
